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RealNetworks' e-music bid
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March 30, 2001: 9:48 a.m. ET
Media player software maker said to be in talks on online subscription service
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NEW YORK (CNNfn) - Three major record companies are in negotiations to license their music to online audio software provider RealNetworks for use in its planned service, tentatively called MusicNet, according to a published report Friday.
The Wall Street Journal said Friday that AOL Time Warner Inc.'s (AOL: Research, Estimates) Warner Music Group, Bertelsmann AG's BMG Entertainment and EMI Group PLC each are negotiating with the Seattle-based company, according to sources people familiar with the talks. AOL Time Warner is the parent of CNNfn.
The company -- which makes a popular program for tapping into Internet music and video broadcasts from PCs -- is offering an ownership interest in the planned subscription service to the record companies.
If an agreement is reached, the recording industry will be partnering with a pioneer of online music delivery. RealNetworks has 190 million registered users.
The software developer has been trying to negotiate a music licensing deal with most of the big music companies for more than a year. Real Networks' software has not led to widespread piracy over the Internet, making the company a more attractive partner to the recording industry than a company such as beleaguered file-swapping service Napster, the Journal said.
 One proposal includes MusicNet being made available to other online services. Another controversial option includes giving Napster a chance to license the service under certain strict conditions.
Subscription music services have emerged in the past year as the pre-eminent business model by which music companies can expand online.
Such services would likely to offer consumers the right to download and listen to varying quantities of music for a fixed monthly fee. The price itself and whether or not the database would incorporate brand new releases as soon as they are available remains to be determined.
Companies are expected to license music to several online services. If completed, the MusicNet deal is not expected to be exclusive.
AOL is said to be developing a service. Vivendi (V: Research, Estimates) Universal's Universal Music Group and Sony Corp. (SNE: Research, Estimates)'s Sony Music Entertainment are reportedly planning a joint subscription service called duet to debut this summer.
RealNetworks and the three record companies are hoping to conclude a deal next week, but there is no guarantee that an agreement will be reached.
BMG declined to comment. RealNetworks, Warner Music and EMI were not available for comment.
RealNetworks (RNWK: Research, Estimates) shares rose 63 cents to $7 in early Friday trading. 
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