Microsoft Launches Music Service

Microsoft Corp. is launching its first online music service, but isn’t yet joining the race toward digital downloads, Wednesday’s Wall Street Journal reported.

The Redmond, Wash., software company Wednesday is announcing the first public test of MSN Music, a free Web-based service that is designed to help consumers discover new songs and artists. As with some other Web services, users can search to find recordings that sound like a song or an artist they know, or have a particular mood or other characteristics.

That search might yield specific songs, but users don’t get to download and keep them. Rather, they can listen to a stream of comparable songs that resemble a custom-tailored radio channel; users don’t have the ability to listen to a particular song on demand.

The distinction is important, because it relieves Microsoft (MSFT) of the need to negotiate individually with record labels for copyright licenses. Companies that help users download popular recordings have to do so — or, like Napster Inc., risk a legal assault by the recording industry.

Microsoft’s announcement comes two days after the announcement of MusicNet, a new joint venture of AOL Time Warner Inc., Bertelsmann AG, EMI Group PLC, and RealNetworks Inc. The new company plans to provide technology and licensed music to others seeking to sell downloaded music through paid subscriptions.

Such services are a major focus for companies trying to create legal alternatives to Napster. And it is clear Microsoft doesn’t want to remain behind two major rivals, AOL and RealNetworks, in subscription services.

Copyright (c) 2001 Dow Jones & Company, Inc.