Industry Heavyweights Join Forces on Internet Music

RealNetworks Inc., the top maker of software used to download music online, announced yesterday that it was teaming up with Warner Music Group, and Trans World Entertainment Corp., to let Internet users download and play songs for free from various Warner artists.

While terms of the deal weren’t disclosed, later this month users will be able to sample songs from Warner artists such as Jewel, Edwin McCain and others through US music retailer Trans World’s TWEC.com Web site.

Develop A Market

The announcement comes just three months after the Seattle, Washington-based RealNetworks introduced its RealJukebox software, which allows music to be played on computers. Analysts say this is a move by the company to develop a market for its more than 7 million registered users.

“RealJukebox has had the most successful launch of any new unbundled product we have seen in the three and a half years we have been tracking software usage,” said Bruce Ryon, a technology analyst with Media Metrix.

In addition, Media Metrix reported that users of digital music players had increased at a pace of about 4 million a month — up 400 percent from June 1998.

RealNetworks Not Alone

Meanwhile, other companies are also trying to build a presence in the burgeoning online music market. In June, America Online bought closely held Nullsoft Inc., which makes the Winamp player of MP3 music files. Just last week, Lycos bought closely held MediaScience Inc., adding software that plays music downloaded from the Internet to its arsenal.

Nonetheless, RealNetworks said it’s still the No. 1 maker of software capable of downloading music online and playing it back at CD quality. In fact, the company said it’s already begun shipping its new RealJukebox Plus software and an update to its free version of the software. The new product, which costs $29.99, has some added features including a graphic equalizer. RealNetworks product will also support Diamond Multimedia Systems Inc.’s Rio player — so users can automatically convert downloaded music into the MP3 format.

Philips Joins Party

Yesterday, Royal Philips Electronics NV, Europe’s largest consumer electronics maker, said it would also bring a new audio player to market capable of downloading music from the Internet.

The player will be able to download MP3 music files from the Web onto a memory card that can hold about an hour of digital-quality music. Philips added that the player would be integrated with RealJukebox and RealJukebox Plus.

While the battle for which software company will ultimately dominate the MP3 market is far from over, industry experts say — so far — RealNetworks is the company to beat.

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