Microsoft presses play on digital music deal

Microsoft said Thursday it will pair with two major record labels in a digital music subscription service that will make use of the software maker's digital media technology and its MSN Internet service.

Pressplay, a joint venture between Vivendi Universal SA and Sony Music Entertainment Inc., has agreed to use Microsoft's Windows Media Audio (WMA) digital music file format and digital rights management (DRM) technology for its subscription music service to be launched in the third quarter. The companies have also agreed to offer a cobranded version of Pressplay that will be available through Microsoft's MSN Music Web site, a free service launched in April.

"This is a huge win for Microsoft," said P.J. McNealy, an analyst with GartnerG2, the growth strategy research arm of Stamford, Connecticut-based Gartner Inc.

Pressplay, a fee-based music download service, is the music labels' response to the digital music services made popular by Napster Inc., Inc. and others. A similar service, MusicNet, was created through a partnership between RealNetworks Inc., EMI Group PLC, AOL Time Warner Inc. and Bertelsmann AG.

The subscription service will allow users to search the vast catalog of music from Sony and Universal Music Group Inc. and download songs on demand. Pressplay has also said it will offer music from other independent and major music labels through nonexclusive agreements. The cobranded version with Microsoft will allow MSN Music users to access the Pressplay music catalog and create and share personalized play lists.

Sony and Vivendi Universal created the service to be available through other affiliates such as Microsoft. The first company to sign on to the service was Yahoo Inc. As part of the deal, Pressplay will be able use Microsoft's DRM technology and Windows Media file format, which competes against MP3 and RealNetworks' RealAudio, with all of its affiliates, Microsoft said.

The announcement could add to the rivalry between these competing media formats, McNealy said. Pressplay's use of Microsoft's DRM technology could mean that the huge music library from Sony and Universal Music Group, which combined represents about 40 percent of the song titles from the major labels, will be available only on the Windows Media Player, which supports the copy-protection technology.

"It would indicate that, but it's unclear at this point," McNealy said.

The announcement also means that at launch, Pressplay will likely use WMA over RealAudio and MP3 as the format of choice for playing songs, he said.

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