EMusic.com Unveils Subscription Plan

Amid the controversy over the sharing of digital music online, music downloading site EMusic.com, Inc. has launched a new subscription service that will give users unlimited access to its musical library for a monthly fee of $9.99 (US$).

The announcement comes one month after MP3.com created an unlimited use classical music and children’s channel, also for a $9.99 monthly fee. However, instead of offering channels of specific musical genres, EMusic.com’s subscription plan allows users unlimited access to its entire 125,000 title inventory of MP3s.

Will Users Pay?

Some industry analysts feel demand for such subscription plans is growing because of the possibility that free online music-swapping service Napster, Inc. may soon be shut down by a federal court. The theory is that the millions of users who have grown accustomed to downloading music via the Internet would be willing to pay a small subscription fee in order to continue the practice.

Other observers doubt that these users will suddenly be willing to pay for a service they have been getting for free. Still, EMusic CEO Gene Hoffman predicts that the court will shut down Napster, opening the door for the next best thing, once free downloads become unavailable.

“I don’t see copyright laws ending anytime soon,” he said in published reports.

Legal Battlefield

Digital downloads of music have been the focus of heated debate and litigation in recent months. MP3.com recently suffered a blow when a U.S. court granted a motion by the Recording Industry Association of America (RIAA) for a summary judgment, holding the company liable for copyright infringement.

The RIAA won another round when the federal judge hearing the organization’s related lawsuit against Napster rejected the music file-swapping company’s argument that its service is legal under the Digital Millennium Copyright Act.

Napster is also being sued for copyright infringement by heavy metal band Metallica and rapper Dr. Dre.

EMusic.com Playing By Rules

Meanwhile, EMusic.com — which laid off 20 percent of its work force in June — has been playing by the rules, paying royalties while trying to make the downloading of MP3s a profitable business.

Last year, EMusic.com acquired privately-held online music site Tunes.com, whose properties include RollingStone.com and DownBeatJazz.com. The stock-for-stock deal is valued at approximately $130 million, based upon the closing price of EMusic.com stock on Friday.

Tunes.com’s network of sites reaches more than 1.3 million unique users and receives more than 28 million page views each month. Tunes.com benefits from promotion in the print version of Rolling Stone magazine.

However, even if Napster’s doors are slammed shut and EMusic.com’s new subscription plan jump-starts its operation, the company must persuade more record companies to allow it to license their artists’ recordings, against hot competition from a host of rivals.

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