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Online Music at a Price

Two American companies offer the first online music subscription services, marking the beginning of what analysts predict will be a billion-dollar business in the coming years.

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Online music to the tune of $9.95 a month

Less than half a year after the well-publicized demise of the free music exchange website Napster, two American companies have stepped in to fill the void.

San Francisco-based Listen.com and RealNetworks, out of Seattle, announced on Tuesday the launch of their online music web sites Rhapsody and RealOne. The sites offer access to hundreds of thousands of music titles, but at a price.

RealOne users will have to pay a monthly subscription fee of $9.95 to access the website's music bank of about 100,000 titles. The music bank comes courtesy of media giants Warner Music, Bertelsmann Music Group and mega music publisher EMI, who partnered with RealNetworks to launch RealOne.

Members can download about 100 songs per month. If they let their membership lapse, they lose access to the songs they've already downloaded.

Rhapsody subscribers get access to roughly the same number of songs, but from independent, rather than large-scale, record labels. The monthly subscription fee is between $5.95 and $7.95.

The offers are the first of many online music subscription services expected to come out in the next few months. Analysts said companies are eager to step into what is anticipated to be a branch worth $1.6 billion by 2005, according to the technology analyst firm IDC.

Pressplay, an online service by Sony and Vivendi Universal is expected out before Christmas, and Napster, which started the online music craze, is expected to release its subscription service sometime next year.

Beleaguered pioneer wants back in

Napster, the beleaguered pioneer in free online music, created in part by 18-year-old college student Shawn Fanning, threw the recording industry into a fit when it launched in 1999. Record executives and many of their artists seethed as millions of users, mostly college students and teens, downloaded and swapped their music online, for free.

A class action lawsuit put a stop to that earlier this summer, when a court ordered Napster to suspend its service. Since then, the multi-million dollar company has been negotiating with music publishers for access to their songs for Napster's planned subscription-based web site.

In October, the two sides seemed to reach a tentative agreement. Napster agreed to pay the $26 million to end ongoing legal disputes with music publishers and songwriters. But the company is not out of the woods yet. Napster still faces numerous lawsuits by record labels.

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