New Charger in Net Music Subscription Derby

Looking to tap the digital music subscription market, personalized software maker MusicMatch announced Monday that it is starting a fee-driven online radio service that will serve as a springboard for the launch of song-selling initiatives in the coming months.

The San Diego, California-based company said the new streaming service, dubbed Radio MX, builds on existing offerings by allowing users to customize radio stations featuring songs from their chosen artists.

MusicMatch also said the service — which will cost US$4.95 per month — serves up no advertising.

Although smaller than many of its record industry rivals, MusicMatch said that it expects its revenues to jump to $25 million this year — in part because of subscribers to Radio MX — from over $10.1 million last year, according to published reports.

Songs for Sale

MusicMatch said it will use the platform to make songs available for download through the service by late summer. However, MusicMatch did not specify whether any recording companies have agreed to allow songs in their catalog to be licensed.

Nevertheless, MusicMatch has expressed optimism that it will be able to license 20,000 to 30,000 songs by the end of the summer and double that selection by the end of the year, according to published reports.

On the Bandwagon

Although the music industry was initially slow to recognize the vast potential of digital delivery, in recent months some of its biggest companies have moved to capitalize on the new channel — and steal some of the thunder from controversial file-swapping services such as Napster in the process.

Last month, three of the top five music recording conglomerates — AOL Time Warner, Bertelsmann AG, EMI Group and streaming firm RealNetworks — announced that they were partnering to form an independent Internet music distribution service called MusicNet.com.

The companies touted the service as a way to provide high-quality music while protecting the intellectual property of record companies and artists, a chief point of contention in the spate of lawsuits brought against peer-to-peer music sharing services.

For its part, MusicNet says its software has 18 million registered users, and 9 million active users. In addition, it says roughly 750,000 people use its radio feature each month.

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