Terra Lycos Unveils New Online Music Service
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Terra Lycos said it partnered with Listen.com to create the new Web service, Lycos Rhapsody, which will offer access to more than 10,000 albums. The service does not let users download the music or record it on CDs, but plans to offer that capability later.
"This is another step in the evolution of the digital music market," said Gartner2Media Research Director P.J. McNealy.
Online music efforts by record companies have not resonated strongly with Web surfers. After being spoiled by the range of artists and possibilities that online-music swapping service Napster offered for free, many Web surfers have been turned off by the price and limits of the services backed by record labels.
Listen.com has struck deals with Bertelsmann AG's BMG, Sony Corp.'s Sony Music Entertainment, EMI Group Plc's EMI Recorded Music and AOL Time Warner Inc.'s Warner Music Group, as well as many independent labels.
Listen.com Chief Executive Scott Ryan said the company was also in talks with Vivendi Universal's Universal Music unit.
Like many Internet media companies, Terra Lycos is feeling the sting from the sharp downturn in advertising spending. Lycos Rhapsody is the company's latest effort to shift away from ad revenues toward paid services.
Internet media companies "are looking for any add-on service that means more revenues, and every single (Internet media) company is trying to transform their business into an entertainment source, not a data source. Music is the first step," said McNealy.
Listen.com's Ryan said the company would introduce CD-burning capability later this year.
"We are working with Lycos on that," Ryan said. "For right now, there are a substantial amount of people who listen online, and we have to address them."
When the service does offer CD-burning capability, Listen.com will have to renegotiate the licenses with the record labels. Ryan said he was already engaged in such talks.
Terra Lycos will give Web surfers free access to the service until June 30. After that, users will be able to choose one of three tiers of service. The free tier will offer 20 different radio stations with FM-quality sound.
The second tier, which company executives likened to "basic" cable, will let users access more than 50 commercial-free radio stations with CD-quality sound and the ability to skip tracks, at a cost of $5 a month.
The last tier will cost about $10 a month and allow for unlimited music via more than 50 commercial-free radio stations with CD-quality sound and the ability to skip tracks and save them to a library.
"It's building on the base of music services we've offered in the past," said David Pritchard, senior director of music, TV and film for Terra Lycos. "Obviously, we have to keep running and so we want to stay on the leading edge of music services that are being offered online.