From the Wall Street Journal: "Early last December, three of the world's biggest music companies launched a counterattack against the rampant digital piracy that has gnawed at their sales in recent years. It was called MusicNet, a joint venture that would provide consumers with a legal alternative to Napster Inc. and other freewheeling Internet song-swapping services.

"Within a couple of weeks, the results were clear, as MusicNet Chief Executive Alan McGlade told the venture's board: 'The current version of the service is not viable...'

"It isn't hard to see why. MusicNet's main owners -- AOL Time Warner Inc., EMI Group PLC and Bertelsmann AG, along with fourth partner RealNetworks Inc., a Seattle software company -- created a service that lacked just about everything that makes online music downloads appealing...Since the launch, MusicNet has attracted only about 40,000 subscribers...

"So now, as free sites continue to attract millions of users and before most of the public has even heard of MusicNet, its backers are trying to fix it. 'The first offering was too clunky and too consumer unfriendly to hold much hope for its success,' says Richard Parsons, AOL Time Warner's incoming chief executive. 'So we are going to go back, and we will come out with a 2.0 product which will be more consumer friendly, easy to use....This is a business of trial and error...'

"In later talks with the music companies, Mr. McGlade pushed the labels to offer features such as permanent downloads and portability, according to people familiar with the matter. Mr. McGlade also has laid out financial targets, according to these people. With major expenses including antitrust attorneys, people familiar with the matter say, Mr. McGlade is now seeking a total of about $10 million more from the partners. In addition, these people say, he wants to make MusicNet more attractive to distributors and consumers, in part by lowering the minimum guaranteed amount that the labels would receive for each song consumers download or stream from the service...Meanwhile, Morpheus has been downloaded 89.3 million times, according to Cnet Networks Inc.'s Download.com, while Kazaa has been downloaded 64 million times.

Read this article in today's Wall Street Journal, or see it online here (registration required). It's also temporarily available for free from MSNBC here.

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From USA Today: "When the combined legal might of the music industry squashed online music-trading pigmy Napster last year, the industry said it was only protecting the just profits of artists and recording companies...

"But new research undermines the assumption. By doing so, it raises questions about the knee-jerk basis on which old industries attempt to quash new technologies...

"It puts another chink in the industry's already hopelessly self-serving argument that people shouldn't be able to freely exchange music now in the same way they exchanged tapes and records in the pre-digital era. If there's no profit involved, of course sharing is appropriate. The industry, not the public, should be forced to adjust...

"A compliant Congress that is well fed with campaign contributions has altered copyright law in ways that could aid the industry's case. But even without a court decision, the losers are clear: music, movie and TV titans who'd rather fight the future than evolve."

Read this editorial in today's USA Today, or online here.

From the company press release: "Hiwire, Inc., the leading provider of advertising technologies for streaming media, today announced that the company remains the market leader for ad delivery and ad serving for Internet radio, based on acknowledged industry-leader Arbitron's ratings for March 2002.

"With over 240 million ads served in March, Hiwire and content partners are validating streaming audio as a medium with reach and cume comparable to other media plan components...

"Many of the top station groups, including ClearChannel, use Hiwire technology to seamlessly insert and track audio ad spots for more than 200 radio stations nationwide. Other top industry streamers, such as Live365, SurferNetwork, StreamAudio, and Beethoven.com, have added their inventory to the Hiwire Ad Network, which now represents over 41% of the available online audio inventory. By comparison, the nearest competitor serves ads for only 10% of the overall inventory, while remaining audio ad serving companies represent less than 1% of the market..."

Note that Hiwire's quoted market share is calculated against a base only of the Arbitron-measured webcasters (although a Hiwire spokesperson says the percentage is similar among Measurecast-rated stations as well).



This feedback is in response to yesterday's coverage of a report that says file-sharing may actually encourage music sales (in RAIN here). Note that this study is from Jupiter Research, and is not endorsed by the record industry.

"Wouldn't hear any of her music via traditional sources..."