There's a new streaming music service in town and this time, it's legal.
On Monday, Emusic.com (EMUS) signed the first licensing agreement for an interactive music service with the National Music Publishers Association. Emusic CEO Gene Hoffman said the streaming service will be integrated into the existing download service by mid-year 2001.
In July, the company rolled out its subscription service, which offers consumers unlimited downloads for a monthly fee ranging from $9.99 to $19.99. But requiring users to download, manage and store their own music can be seen as a drawback.
"You could build this into a business, but I don't think that people (would be) willing to pay $10 if this was just a streaming service," Hoffman said.
The streaming component, where users have the ability to determine how they want to listen to their music, will be added by the second quarter of next year, Hoffman said.
While other services also offer streaming, the flexible licensing agreement will allow Emusic to create a more user-friendly service.
"We have a new and additional right to do fully interactive streaming, so what users will have is the ability to listen to anything they see on the site in whatever order they choose," Hoffman said.
High-profile companies like Farmclub.com and MP3.com rolled out streaming services for the public despite potential conflicts with copyright laws. Emusic.com took the direct route and negotiated licensing agreements with publishers and musicians to insulate the company from lawsuits.
"The advantages of having negotiated good licenses, not having to work within the constraints of the DMCA compulsory, would let them develop interactive streaming services that are much more compelling than the run-of-the-mill webcaster can," Forrester analyst Eric Scheirer wrote in an e-mail.
"Right now, I think Emusic offers the most compelling subscription, because it's about new content. As long as your music interests are in a content niche they cover well – jazz, punk rock, classical."
Other companies haven't fared so well in obtaining the licensing agreements.
The Universal Music Group, which owns Farmclub.com, was sued by the National Music Publishers' Association on Dec. 8 for copyright infringement. The Internet music label created the streaming subscription service without signing a licensing agreement with the publishers.
In April, MP3.com (MPPP) was found guilty of copyright infringement in a federal court for the creation of its streaming locker service. The Universal Music Group refused to settle its case, and eventually secured at $53 million judgment.
Representatives from Farmclub.com declined to comment.