Subscriptions lagging to MusicNet service

RealNetworks' much-hyped MusicPass service, a download-in-bulk offering backed by the MusicNet consortium of industry powerhouses, isn't drawing the flocks of customers the company hoped it would, according to one RealNetworks executive.

"It's not doing as well as we would like," said RealNetworks President and Chief Operating Officer Larry Jacobson, after a press conference here Tuesday at which RealNetworks unveiled a host of updates to its media player software and content additions to its expanding subscription services.

Rights issues are the major obstacle inhibiting the growth of the nine-month-old MusicPass service, he said. The backing of Bertelsmann AG, AOL Time Warner Inc. and EMI Group Plc give MusicNet access to a formidable catalog of 75,000 songs, but the service's range still can't match that of guerilla peer-to-peer networks such as Napster Inc. in its heyday.

RealNetwork's subscription offerings now draw 750,000 monthly users, according to the company. In addition to MusicPass, priced at US$9.95 per month, RealNetworks' subscription packages include SuperPass (also $9.95 per month), which offers access to a wide array of audio and video content, plus an assortment of more specialized packages put together in conjunction with partners. (One popular package of the moment is CBS's 24-hour live stream of Big Brother 3 contestants locked in a webcam-strewn house, available as part of SuperPass or for $24.95 for the season.)RealNetworks won't break down its subscriber base by offering, but SuperPass subscribers make up the majority, Jacobson said. The next most-popular package is MLB.com's $14.95 per month audio stream of coverage of all major league games.

RealNetworks' content strategy for the future is to tinker only slightly with the lineup for its SuperPass, and to preserve the service's $9.95 price, which RealNetworks considers a good "entry-level" fee, executives said.

Rather than stuffing more content into SuperPass, RealNetworks plans to expand its line of add-on offerings. It introduced Tuesday two new subscription packages, RadioPass ($5.95 per month) and College SportsPass ($6.95 per month). College SportsPass offers content not available at all through SuperPass, while RadioPass offers a sprinkling of otherwise-unavailable premium stations and a higher-quality audio stream than SuperPass'.

Fee-carrying packages such as RadioPass may offer webcasters a way to fund the new royalty structure set recently by the U.S. Copyright office's Copyright Arbitration Royalty Panel's (CARP), suggested RealNetworks. Speaking at the press conference was a representative from one webcaster that went offline because of the royalty brouhaha, but will return to the Internet this week as part of RadioPass.

KPIG Radio, located in Freedom, California, began broadcasting on the Net in August 1995 and attracted a quarter-million listeners each month, but pulled its stream recently because of concerns that it would be economically crippled by the new royalty fees, said station DJ "Wild" Bill Goldsmith. RadioPass offers both a revenue stream for the station and a higher-quality audio experience for its listeners, he said.

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