Under the deal, RioPort said it secured rights to distribute BMG songs via its upcoming music subscription service, dubbed PulseOne. The distribution license also includes the right to transfer songs to portable devices and other consumer electronics products such as music phones, digital stereos and set-top boxes.
The deal comes shortly after the major labelstheir paid subscription services, MusicNet and Pressplay, in a move to shift the online music scene from free file-swapping services. MusicNet and Pressplay, however, have yet to allow songs to be downloaded to portable devices, giving RioPort a head start in this heat of the online music race.
T.S. Kelly, principal analyst at Nielsen/NetRatings, said that because most people want to be able to take their music with them, "portability is a key component in making a lot of these music services work."
Although RioPort may be the first to offer that capability, Kelly noted that RioPort's advantage is only a "short-term one."
"I look at music services to be as kind of evolving to meet the needs of consumers...I think it's a matter of time before both Pressplay and MusicNet are doing exactly the same thing" as RioPort, Kelly said.
Until then, many of the major labels are working with several competing subscription services to cover all their bases. Although BMG parent Bertelsmann is backing MusicNet, the record label said it is in active discussions with numerous Web companies regarding licenses for its music.
"BMG continues to license its catalog to online services that meet our requirements, most notably those that respect our artists' rights and offer a positive consumer experience," said company spokesman Nathaniel Brown.
With RioPort's subscription service for online music, BMG has some assurance that its artists' music will not be pirated. RioPort said its service includes technology, dubbed Direct-to-Device, that makes it possible to play music downloads on portable devices and still enforce content usage rules such as limiting the number of times a song can be heard or setting an expiration date for the download.
RioPort said it expects PulseOne to launch this quarter through online retailers, broadband and wireless service providers, and consumer electronics companies including Samsung, Sanyo, Sonicblue and Texas Instruments. It said it plans to offer approximately 22,000 tracks from BMG with additional songs released over time. RioPort added that it expects to announce similar distribution deals with other major record labels.