Musicbank is just a short leap away from launching its on-demand, streaming service.
On Monday, Musicbank signed its fourth licensing deal with a major label -- this time with Sony Music -- leaving EMI and the music publishers as the only holdouts in the space. EMI is expected to join the fold, but dealing with the music publishers is a bit stickier.
Terms of the deal weren't disclosed. The Universal Music Group, BMG, and Warner Music have equity investments in the company in exchange for the licensing agreements.
Unlike competitor Mp3.com -- which recently obtained a license as part of an out-of-court settlement with the publishers -- Musicbank has been working with the National Music Publishers Association from the very beginning. Musicbank CEO Michael Downing believes that will make a continuing relationship with all content providers run much smoother.
"Our position has always been there to pay the publishers," Downing said. "You do make a digital replication of the CD to put it on the servers, and that is a duplication, which involves a CD, so that publishers need to be involved.
"The challenge is there really is no basis for this model, and everyone is trying to figure that out. Our stance has been that once we do get it figured out, and when everyone agrees on the fee rates, we'll write a check."
The streaming music company signed up encoding company Loudeye to digitize the 150,000 CDs it hopes to make available to consumers this fall. The tracks, which include music from the four labels, will be encoded in Real Audio, with Windows Media to follow.
The label-friendly streaming service has also struck a partnership with the Virgin Megastores retail chain. That deal lets consumers who purchase music at retail outlets from participating music labels to immediately access their music through a virtual jukebox.
Even with its current deals, Musicbank is going to face stiff competition from Mp3.com which is expected to re-launch its my.mp3.com service before the end of the year. But Downing isn't worried that the press Mp3.com has generated and its brand name will hurt his business.
"That doesn't concern me," Downing said. "It's hard to get these licenses so I don't think we're going to see a lot of competitors. Besides, there are 75 million people out there listening to music on the Web, so I think we're going to be alright."
