You will be redirected back to your article in seconds

Static for music biz

Justice Dept. probes online distrib services

The dog days of August have brought more than blistering heat for the recording biz, which is being asked to prove why two online music distribution services backed by the majors won’t snuff out competition.

Industry execs on Monday confirmed that the Dept. of Justice is conducting a preliminary inquiry into MusicNet and Pressplay, both of which are scheduled to bow within weeks. They said that such an inquiry was essentially assured when the European Union announced its own investigation earlier this summer of the two services.Both companies promise digital music tracks on a subscription basis, offering several thousand major-label tracks for a flat fee. MusicNet, which is backed by AOL Time Warner, Bertelsmann, EMI, Zomba Music and media software maker RealNetworks, has licensed its service to AOL, Real and Napster. Pressplay, a 50-50 venture between Sony and Vivendi Universal, has inked partnerships with Yahoo, Microsoft’s MSN Music and MP3.com.

The nascent music Netcos have declined to comment about the probe as yet. Sources close to the situation said at least one of the majors backing the companies has been in contact with the Justice Dept. in an attempt to hammer out a compromise, but the talks are still very preliminary.

Lawmaker chorus

Last Friday, two Capitol Hill lawmakers said they were likewise concerned about a possible monopoly by the majors, and they introduced legislation that would force music congloms to offer the same price and other conditions when striking licensing deals with unaffiliated Internet ventures.

Reps. Rick Boucher (R-Va.) and Chris Cannon (R-Utah) said they were alarmed that a distribution duopoly might be forming, and they promised hearings on their legislation when Congress returns in early September from the August recess.

Napster veep for public policy Manus Cooney, who was on hand as the lawmakers detailed their bill, said introduction of the measure was “encouraging” news.

Washington insiders cautioned that the DOJ probe is only preliminary in nature and that other Internet ventures have been likewise studied for possible antitrust violations.

More Digital

  • Vaccination

    YouTube Yanks Ads From Anti-Vaccination Conspiracy Channels

    YouTube, under fire for facilitating the spread of conspiracy theories and other misinformation, said it will no longer serve ads on channels that espouse anti-vaccination rhetoric. The Google-owned video giant cited its advertising policy that bans “dangerous and harmful” content from eligibility in its monetization program. “We have strict policies that govern what videos we [...]

  • Evan Williams, Twitter founder (R) and

    Twitter Co-Founder Evan Williams Steps Down From Company’s Board

    Twitter co-founder Evan “Ev” Williams is stepping down from the company’s board, Twitter announced in a SEC filing Friday afternoon. Williams will depart from the board at the end of this month, according to the filing. “It’s been an incredible 13 years, and I’m proud of what Twitter has accomplished during my time with the [...]

  • Facebook Logo

    Facebook Shuts Down Controversial Ovano VPN App

    Responding to a continued backlash over its data collection practices, Facebook pulled the plug on its Ovano VPN app Friday. Ovano, which promised users an added level of privacy while using public Wifi hotspots, was used by Facebook for market research purposes. Facebook removed the app from the Google Play store Friday, and the company [...]

  • Smosh

    Smosh Acquired by Rhett & Link's Mythical Entertainment

    UPDATED: Smosh, the long-running YouTube comedy brand, has been acquired by Mythical Entertainment, the company formed by Rhett & Link, hosts of comedy show “Good Mythical Morning.” As first reported by Variety last week, Mythical emerged as the leading candidate to buy Smosh, which was left stranded after parent company Defy Media shut down without [...]

  • China Video Streaming Giant iQIYI Loses

    Chinese Video Giant iQIYI Loses $1.3 Billion in 2018

    Chinese video streaming firm iQIYI lost over $1.3 billion in 2018, as revenues and subscriber numbers ballooned. The deepening losses reflected ever higher spending on original content production. Announcing its first full-year financials since a March IPO that launched it onto the NASDAQ, iQIYI said that it lost $1.3 billion (RMB9.1 billion) last compared with [...]

  • Roku headquarters

    Roku Aims to Top $1 Billion in Revenue in 2019, Beats Holiday Quarter Earnings Expectations

    Roku wants to become a billion-dollar company in 2019, and invest more in its ongoing international expansion. The streaming-device maker told investors on Thursday that it expects to generate between $1 billion and $1.025 billion this year, and that international growth was one of its key investment areas for 2019. Roku made these announcements as [...]

More From Our Brands

Access exclusive content