XM, Napster in joint online music venture

New service will let subscribers bookmark tunes using new XM-compatible MP3 players and buy them online later.

Online music vendor Napster and satellite radio provider XM Satellite Radio are making music together.

The two companies said late Tuesday they would launch an online service that enables XM's 4.4 million subscribers to buy music they hear on the paid XM radio service.

The two plan to jointly launch "XM + Napster," in the fourth quarter in conjunction with the availability of new XM-compatible MP3 players that let users bookmark songs they hear while listening to the radio for future purchases online.

After the MP3 player is connected to a personal computer, the service will match the marked XM titles with songs in Napster's catalog so that they can be purchased.

Subscribers will also be able to use the XM + Napster service to organize playlists using other songs from personal libraries and transfer these unique playlists to the XM players.

Currently, XM's MyFi portable radio sells for about $299.

Those XM subscribers, without the new MP3 devices, can also tag songs for purchase online through XM Radio Online, an existing Web-based service.

Analysts have long said satellite radio is likely to converge with music players and other portable devices. XM Satellite is the No. 1 satellite radio provider, directly competing with rival Sirius Satellite Radio in the nascent market.

Sirius in February said it had discussed with Apple Computer the possibility of adding its service to Apple's popular iPod music player, but Apple Chief Executive Steve Jobs did not see the need at that point to combine the functions.

After launching its wearable MyFi device in October, XM chief executive Hugh Panero said he believed one day a portable satellite player would be combined with portable players that store music, like an iPod.

Story Copyright © 2005 Reuters Limited. All rights reserved.

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