Will Web See the 'Celestial Jukebox' for Digital Music?

N E W   Y O R K, June 18, 2001 -- Could a "celestial jukebox" be in the stars?

That's the term music industry observers have given to an Internet site that would, in theory, contain all the music belonging to the five major record labels, as well as a wealth of independent-label music. Such a site would certainly be the leader in the online niche that Webnoize, an Internet entertainment consulting firm in Boston, projects to produce $3 billion in annual revenues by 2003.

But even though the five major labels are planning to launch subscription-based Web services by the end of the summer, they have split into two camps. Warner Music, EMI and BMG (along with Internet technology company RealNetworks) have formed a venture called MusicNet, while Sony and Universal have joined forces on a project once known as Duet but now renamed pressplay.

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And industry observers say the split between the major labels might have to end if any one music site is going to take the place of Napster, the phenomenally popular file-swapping site. In March, a judge ruled that Napster had to stop allowing downloads of copyrighted songs; currently the site features independent artists from well outside the mainstream.

"Music services have to have everything," says Ric Dube, an analyst with Boston-based Internet entertainment consulting firm Webnoize. "All the consumer cares about is that he can go to one store and can get any disc."

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Standoff

That's a step music's Big Five have not yet resolved commercially, although they put up a united front in the legal fight against Napster.

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MusicNet has licensed its offerings to America Online, the leading Internet access provider — and most-visited Web site — in the United States. (AOL Time Warner is the corporate parent of Warner Music.) It has also struck a deal with Napster, which is planning to reconstitute itself as a two-pronged site that will feature a major-label pay-for-play component as well as access to the music of independent artists.