Microsoft Ready to Pressplay in Online Music Wars

The ever-changing state of online music is turning into a tale oftwo monopolies with the announcement Thursday that Pressplay, the musicventure backed by Sony Music Entertainment and Universal Music Group (UMG),has joined leagues with Microsoft to deliver a co-brandedMSN Musicsubscription service.

Pressplay, formerly known as Duet, will now be able to deliver its musicsubscription service through the Microsoft Windows Media format. It also gains access to Windows Media digital rights management (DRM) technology for content protection.

“Microsoft needed a good content partner in order to continue to push theWindows Media platform,” Webnoize director of research Lee Black toldthe E-Commerce Times. “From Pressplay’s perspective, at least we now knowthey have a technology platform and a powerful partner, so they’re movingahead.”

The new alliance puts some serious competitive heat on MusicNet, the jointventure that includes RealNetworks, BMG Entertainment, EMI Recorded Musicand Warner Music Group.

Musical Chairs

The deal with MSN is Pressplay’s second major alliance. In April, Pressplayannounced that Yahoo! will initially market Pressplay as a streaming-musicchannel and later offer digital downloads to the millions of Web surfers whouse the Internet portal.

MSN Music also debuted in April, offering consumers a personalized streamingmusic service. The company said the new Pressplay subscription service isexpected to launch this summer in the U.S., and Europe in the fall, but Blackis skeptical about the real timing for either MusicNet or Pessplay.

“I think we’re still a year-and-a-half away from a service consumers will bewilling to pay for in terms of digital music, because the publishers’licenses are such a nightmare and just aren’t there yet,” Black said.

Half-Fledged

Black also said that Pressplay, which currently has the rights to offer only Sonyand Universal licensed music, still has a ways to go before it will become afull-fledged online music player.

“Their next move has to be getting some more content and to introduce somebusiness models from which either consumers or affiliates can plug into,” Black said.

The stage has now been set for an evolving battle between two online musicpowerhouses. But which one has the advantage: MusicNet — whose licensees include America Online and Napster — or Pressplay with its Microsoft backbone?

Advantage MusicNet

According to Black, it depends on whether the issue is content or technology.

“As far as content, MusicNet, which uses RealNetworks’ player software, has the better advantage,” said Black. “From a technology standpoint, we hearbetter things about Microsoft’s technology than RealNeworks, but I kind ofthink that content is more important.”

But at the end of the day, Black believes, it may be Web consumers who lose out.

“From a consumer standpoint, now there’s a duopoly of online music guarded by two technology platforms,” Black said.