The two major online subscription services rolling out this month seem to be designed more to appease politicians than to provide people with music, some industry watchers said Wednesday.
Yahoo and Microsoft began selling music on Wednesday with PressPlay, a joint venture between Sony Music and the Universal Music Group. That joins MusicNet, which is available through RealNetworks and America Online, as the only legally licensed sites where people can purchase digital music.
Neither system has access to all the music from each of the five major labels since the two companies don't work together -- and some critics have already started calling the services "MusicNot" and "PressPause."
This has some analysts speculating that the services were rushed to market to quell the scrutiny the record labels received from the Senate, the House of Representatives and the Department of Justice over licensing and competition issues.
"These music services are not designed for the public, though they are a first toe into the water of services and so are nothing like swimming," said Jim Griffin, founder of Evolab, an incubator for wireless technology and a frequent consultant for the record labels. "They are designed for the legislators and policy makers, efforts to convince them that the government needn't enact the more enlightened music practices."
PressPlay allows people to burn a limited number of tracks onto a CD, share play lists and choose from four pricing models. MusicNet can be tailored by each online retailer but it comes with a built-in $10 fee.
Both systems received less-than-stellar performance grades from consumers. The sketchy experience was so frustrating that one person posted a parody site just hours after PressPlay was made available.
The recording industry has taken a wait-and-see approach to legislators and government officials pushing it to begin selling music online.
The most vocal critic is Orrin Hatch (R-Utah) who threatened the five labels with legislation that would open their catalogs to Internet media companies.
Congressmen Rick Boucher (D-Virginia) and Chris Cannon (R-Utah) went a step further by introducing the Music Online Competition Act of 2001, which would create just such a licensing structure.
Then in October, the Department of Justice opened an investigation into the licensing practices of the labels. The inquiry helped push both MusicNet and PressPlay into working overtime to hit the goal of launching before the end of the year.
While MusicNet's launch did little to thrill consumers, the PressPlay service could ease some of the issues legislators have with the industry, one industry analyst says.
"The range of price points, the CD burning capabilities, and allowing people to use other computers to access their music shows a willingness to engage in the market place," said Eric Scheirer, Forrester's Internet entertainment media analyst. "Once you recognize these services are looking for the right price to charge for the features they do offer, PressPlay appears ready to let the market place do the work."
The best hope for the recording industry would be a massive adoption rate of either service. While few believe that will happen, some consumers aren't ready to give up on subscription services despite the negative reviews of both.
Adam Chance knew the limitations of PressPlay before he signed up. He was just looking for an online service that worked after RealNetworks' software downloads crashed his computer several times.
He is only willing to pay for these services until something better comes along.
"I want to own my music," Chance said. "This is music rental. If I stop paying my bills, the music stops playing. But CDs are a supreme rip-off. So this is a good compromise, hence I am willing to try it."
New copy-protections that keep people from listening to CDs on their computers nudged Chance toward paying for PressPlay.
Ironically, the competition between the two companies that could drive consumers away from both services could generate the very competition that saves the music industry from itself.
Rather than use two desktop music players that store some music files and not others, Chance decided to pay for the MusicMatch software so he could store all his songs in one place.
Others have had the same experience, helping MusicMatch sell 75,000 monthly subscriptions for its streaming radio service. Consumer demand for digital music is so great, people are willing to pay for a service that won't allow them to hear music on-demand.
Instead of getting specific song downloads or streams, RadioMX lets people choose a specific genre or group of musicians. The service then steams a play list based on those selections.
"This offers a more compelling service for the price than either MusicNet or PressPlay because we have all the content from the labels," said Christopher Allen, senior vice president of product marketing at MusicMatch.
"There is a trade off, because of the limitations of the licenses out there nobody has all of the music. With us, you can get near on-demand service and that is a superior experience."
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