FullAudio Picks Windows Media for Subscription Service

In a sure coup over RealNetworks Inc. , Microsoft Corp. won the right to put its Windows
Media technology as the staple platform for FullAudio Corp.’s pending digital music subscription service.


FullAudio will preview its music subscription service at DEMO 2002 in Phoenix this week. The Chicago-based firm plans to make
available more than 70,000 tracks for music lover and will distribute them through partners such as Clear Channel Communications.


The latest player to air its services in an already crowded field that includes MusicNet, Listen.com’s Rhapsody and pressplay,
FullAudio offers cache download technology beyond traditional, streamed tunes. This means tracks will sound better and will allow
partners’ customers to play tracks on their PC when they’re not connected to the Internet.


FullAudio also has licenses to extend digital music to portable devices and is compatible with consumer products that incorporate
secure system clocks supporting digital rights management. This is crucial as both security and portability are key drivers for the
success of online music subscription services, according to analysts.


Like MusicNet, FullAudio has created a platform to be licensed by distributors who wish to offer digital music services that ensure
all parties will be properly compensated. For a monthly fee, the FullAudio subscription platform enables distribution partners to
provide consumers with unlimited play of a set number of chosen tracks.


FullAudio, whose goal is to offer access to a million tracks, is currently offering digital music services for 30 Clear Channel
stations in Chicago, Houston, Los Angeles, Phoenix and Salt Lake City. Clear Channel will officially launch and distribute
FullAudio-based music services to consumers in March and, per its new agreement with Microsoft, the service also will be promoted on
WindowsMedia.com.


In January, market researchers Jupiter Media Metrix claimed digital music sales in the U.S. via subscription
models and single paid downloads will generate $1.6 billion in revenue by 2006, with $1 billion, or nearly 63
percent, coming from subscriptions alone.


“Digital music subscriptions have the potential to revive the flagging music industry,” said Aram Sinnreich, Jupiter senior analyst.
“The key to unlocking this market will be remixing the distribution chain — taking advantage of digital media’s fluidity to allow
labels, music sellers and technology companies to focus on what they do best.”

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