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The major labels' systems include the online services Pressplay (owned by Vivendi Universal and Sony) and MusicNet (EMI, AOL Time Warner, Bertelsmann and the software firm RealNetworks). Initially hyped as the legitimate alternatives to the original outlaw Napster, these services have flopped with consumers--especially where CD burning is concerned. Pressplay charges $9.95 to let you burn 10 tracks a month--barely enough for one CD. MusicNet offers no burning capabilities, but EMI seems to have belatedly recognized the need, at least for fans of Sharon Riley and Faith Chorale. You can now burn up to 20 tracks from EMI's Christian-music catalog for $9.95 a month. Then there's the new version of Napster, which, with the aid of BMG, plans to sell a subscription service as soon as it can strike licensing deals with the other labels.
The industry is greeting these first forays into online services with caution. Doug Morris, chairman of the Universal Music Group, calls Pressplay "an exercise in trying to understand what's going on." There may be plenty of money to be made from selling raw MP3s and unlimited CD-burning privileges. But with major media companies so wedded to the old ways of selling music--nearly 40% of Vivendi's operating income flows from its media business--allowing users to burn from their catalog seems akin to dragging a large wooden horse into their boardroom.
Yet in the long run, turning Trojan might be Big Music's best strategy for a return to growth. Given that the established music industry of the day has alternately resisted and then succumbed to every new technology since the player piano in 1896, users would seem to have the weight of history on their side. "A business strategy that alienates your customer base isn't a good strategy," says Andreessen. "The most productive way to solve the problem is to satisfy demand." CDs saved music in 1985; perhaps some modest fencing around the cash cow of CD burning can save the industry again in 2003. --With reporting by Daren Fonda/New York and Jeff Chu/London