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Rhapsody Gets CD-Burning Clearance from Labels

Listen.com's Rhapsody digital music service on Thursday announced deals with several record labels to allow CD-burning of music tracks, another sign the record industry has caved on the issue of download ownership and portability.

San Francisco's Listen.com, which already offers unlimited access music files from its $9.95 per month service, announced licensing deals with AOL Time Warner's Warner Music Group, Universal Music Group and a host of independent labels to pave the way for CD-burning after files are downloaded.

Starting next Monday, the company will add an "All Access" play that sets the pricing at 99 cents per song to burn the tracks, in addition to the monthly fee. This marks the first time a legitimate digital music service will allow pay-as-you-go CD-burning capabilities.

The Listen.com announcement, coming on the heels of a similar move by Universal/Sony-owned Pressplay, is seen as a huge concession from the early days in the sector when the record labels adamantly refused to allow consumers to burn CDs or keep listening to downloads after paid subscriptions expire.

Rhapsody is putting the finishing touches to a new version of its software, building the CD-burning capabilities right into the client and adding minor upgrades to the service. The next iteration of Rhapsody is slated for release on Monday.

Listen.com CEO Sean Ryan discussed the breakthrough Thursday. "(This) is an important step forward in how consumers access and listen to music through Rhapsody...Our subscribers can already listen to the world's largest library of digital music," he added.

In addition to Rhapsody and Pressplay, Chicago-based Full Audio has also reached similar licensing deals with the big music labels. AOL-based MusicNet is expected to follow suit.

Pressplay's portable downloads come at a higher fee -- $17.95 per month - and also includes unlimited streaming, unlimited tethered downloads. Unlike Rhapsody's pay-as-you-burn model, Pressplay only allows 10 songs to be burned onto a CD within the month. Rhapsody, however, does not allow any music downloads but instead allows unlimited access to its streams.

The breakthrough to get the thumbs-up from the labels for CD-burning, while representing a departure from an earlier stance, was expected, analysts say.

Jupiter Research digital music analyst Lee Black said the issue of download ownership has been critical in the fight to legitimize music downloads in the face of competition from rogue peer-to-peer services like Morpheus and KaZaA.

"This is an important breakthrough, "Black said. "It puts the label-sponsored services on the same level with the free file-sharing services. The only way that these label-sponsored services are going to be competitive with the file-sharing world is through services. They can win by providing quality music files, faster downloads. That's what the consumer is willing to pay for. The 'ownership of downloads' issue will make this much more appealing."

Still, Black believes it remains an uphill battle for the digital music services to compete with the free P2P offerings.

"It's still hard to compete with free but you can certainly try to offer more value to consumers by creating a better connection to the artists and offering faster downloads of accurate files. The P2P services will never offer that. Plus, the fact they can offer an advertising-free product goes a long way," Black added.