SEATTLE, Feb 20 (Reuters) -
Music software makerMusicMatch Inc. said on Wednesday it had 100,000 paying subscribersfor its custom Internet radio service, but forecast onerous licenseterms from major record labels meant it would be a long time beforeit could offer songs for download.
Privately held MusicMatch makes a "jukebox" program forrecording and playing music on a personal computer, competing withindustry heavyweights like RealNetworks Inc. , Microsoft Corp. and AOL Time Warner Inc. .
Last May, it launched Radio MX, a subscription service that letsusers listen to custom Internet radio stations built aroundpersonal preferences and groupings of similar artists for a monthlyfee.
The service now, which charges $5 a month or $40 a year, claimed100,000 users, making it one of the largest Web music subscriptionservices, MusicMatch Chief Executive Dennis Mudd said in aninterview.
That figure showed Radio MX was more attractive than newfee-based download services recently launched by the major recordlabels.
Those services -- MusicNet and Pressplay -- are hoping to tapthe big appetite for downloaded music demonstrated by song-swapservice Napster, which was shut down last July after the musicindustry successfully sued for copyright piracy.
MusicNet is backed by the Bertelsmann AG , EMIGroup Plc and AOL Time Warner music labels, and usesRealNetworks technology. Pressplay involves Sony Corp. and Vivendi Universal and runs on Microsofttechnology.
Subscriber data for those offerings, which launched late lastyear, are unavailable, but analysts believe they have so far seen atepid reception from music fans, who complain many artists areunavailable and decry restrictions on moving the songs to portableplayers and recording them on CDs.
"We think this really does serve as an indication that MusicNetand Pressplay are going about this the wrong way," Mudd said.
For a subscription service to be successful, Mudd said, "Youneed all the content from all the artists across the labels, itneeds to be all you can eat and you need an easy way to findplaylists and music that you want."
San Diego-based MusicMatch hoped to offer downloads at somepoint, but said current licensing terms by the labels were toorestrictive and costly to make such a service viable.
"We're in the same meetings that everyone else is, trying toobtain economic and compelling licenses from the labels. But that'sgoing to be a long way off," Mudd said. "I don't want to offerconsumers something that's not compelling."
MusicMatch, which competes against software like Real's RealOneplayer, Microsoft's Windows Media Player and AOL's Winamp, had some25 million registered users and 13 million active users of its freeplayer, Mudd said.
It had sold about 1 million copies of its $20 premium software,Mudd said. Apart from being available over the Internet, MusicMatchis bundled with PCs from Dell, Hewlett-Packard and Gateway, andalso comes with many portable digital music players.