Press or Play for Roxio and Microsoft

Roxio’s acquisition of Pressplay potentially raises the ante in the distribution of online music content. Roxio, which in November purchased the assets of defunct file-trading company Napster, plans to launch a legal version of the swapping service. Pressplay’s catalog of 300,000 songs--about 100,000 more than what is available through Apple’s iTunes Music Store--would give Roxio a good start.

The larger question is what implication the acquisition might have on Microsoft’s Windows Media Audio format, which digital rights management (DRM) technology protects Pressplay content. To date, Microsoft has treated Pressplay as an important showcase of copy-protected music content delivered as WMA. A revitalized Napster could be an important conduit for greater distribution of WMA content. But much depends on the shape of the new Napster service and whether Roxio chooses to continue using WMA.

Pressplay largely is a subscription service, where subscribers pay about $10 a month to stream songs. Additionally, some content can be purchased but with some restrictions on CD burning or use on portable music players. If early sales at the iTunes Music Store--more than 2 million and counting--are any indication, many consumers appear to prefer paying for music they can own rather than coughing up a monthly subscription fee. Roxio apparently is considering both subscription and paid download models for the new Napster.

If Roxio chucks the subscription model for the straight sales approach adopted by Apple and continues to use WMA, Microsoft might finally see some real, commercial traction for its digital audio format. After all, the new service would capitalize on two strong brands, Roxio and Napster. To reach that point, Roxio and the five record labels supplying songs to Pressplay might need to work out a more consumer-friendly means of implementing Microsoft’s DRM. Transparency of the DRM is part of the appeal of the iTunes Music Store. Many consumers might never know the songs are protected, because of the way the DRM is implemented.

Roxio is a longstanding Microsoft partner, which CD burning technology is used in Windows XP. The potential strategic and technological synergy between Roxio CD burning and Microsoft digital media could give Windows users a taste of the kind of music buying service Apple offers Mac users today.

Posted by Joe Wilcox at May 19, 2003 04:05 PM