RealTime IT News

FullAudio Switches the MusicNow

In a week of increasing noise from the digital music subscription sector, Chicago-based FullAudio is fine-tuning plans for a revamped -- and renamed -- service that adds unlimited tethered downloads and streamed songs for $9.95 per month.

With analysts positioning FullAudio as a prime candidate for an acquisition, most likely by Microsoft , the company's rebranded MusicNow service will join competitors in offering song downloads for 99 cents each when it is launched on Friday.

The company is positioning the new MusicNow as a shift away from the "search-and-browse" database model to a complete "entertainment experience," that will feature paid radio channels targeting a grown-up audience.

For $4.95 per month, the company will sell access to 36 radio channels. A channel will let paying subscribers listen to premium radio stations or to play on-demand relevant content like hit singles or programmed bundles of music and entire albums.

FullAudio CEO Scott Kauffman made the announcement at the Digital Music Forum in New York City, making it clear the company was targeting those music fans who are willing to pay to avoid the congestion and intricacies of the illegal file-sharing networks.

"Illegal file downloading services, such as Kazaa and Morpheus, are less effective at meeting the needs [of busy consumers] since these large databases of music require consumers to spend hours 'hunting and pecking' for individual songs," Kauffman said.

"We're going after the consumer with little time and an abundance of money, not the consumer with little money and an abundance of time," he added.

FullAudio, which makes no secret of its tight relationship with Microsoft, is revamping to compete in a crowded market of big-name subscription services. MusicNow pricing appears in line with that of its rivals and even includes concessions on download-and-own for consumers.

MusicNow from FullAudio will look very much like Listen.com's Rhapsody service, which also offers custom radio stations for $4.95 per month and a $9.95 monthly plan that allows unlimited streams and access to burn songs for 99 cents. (Listen.com is running a promotion on Lycos where subscribers can download and burn songs for 49 cents each).

It appears all the competing services have settled on a price tag. America Online's just-relaunched MusicNet on AOL service offers 20 streams and 20 downloads for $3.95 per month and an $8.95 per month plan for unlimited tethered downloads. A pricier $17.95 per month option on the AOL service will allow users to burn 10 songs to a CD.

Pressplay, the service backed by Sony, Microsoft and Yahoo , also offers radio stations and unlimited tethered downloads for $9.95 per month in addition to song downloads that allow for CD burning.

For FullAudio, which has licensing deals with all five major record labels -- Bertelsmann AG, EMI Recorded Music, Sony Music Entertainment, Warner Music Group and Universal Music Group -- the new sales strategy comes amidst talk that the company would be a buyout target for a bigger company with deeper pockets.

"We view FullAudio and Listen.com as possible takeover candidates. They both have good technology but that doesn't necessarily mean financial success," said Greg Lee, a research associate for Raymond James & Associates.

"Those services haven't taken off and they're absorbing major losses. With Roxio's plans for Napster coming along soon, it will be very tough for them to survive alone," Lee told internetnews.com.

Lee predicted the fee-based digital music landscape would soon be in the control of the big-name tech firms and music labels. "The standalone services all have very good products but they haven't gained much traction," Lee said. This opens the door for the deep-pocketed companies, like Microsoft, Yahoo, RealNetworks or AOL to gobble up the struggling companies, he added.