New Music Service to Allow CD Burning

EMI and Liquid Audio today are expected to roll out the first online music service from a major record company that trusts consumers not to share the music they buy with pirates.

The service, called BurnItFirst, has two features unique among major-label offerings online: The songs can be kept permanently, and they all can be recorded onto a CD. Although the songs have electronic locks to deter copying, those locks vanish as soon as the music burns onto a disc.

The catch is that the new service will offer songs only from EMI’s Christian music catalog, at least initially. But it offers a better deal than most new CDs, enabling users to download 20 songs per month for a little less than $10.

The “unique demographic” of Christian music fans helped persuade executives at the label to give BurnItFirst subscribers more latitude than other services do, said Jay Samit, the company’s senior vice president of new media.

“Consumers have spoken loudly. They want to have the freedom to burn music,” Samit said. “We have no problem with that. We just want to make sure our artists can make a living from music and are compensated for that.”

Scott Hughes, a senior vice president at EMI Christian Music Group, said, “What we’re trying to do is really provide a legal [alternative] to stealing, to piracy. It’s a real problem in the overall music community.”

Along with a few other recent developments, the new service suggests that the labels might be willing to take more risks to compete with unauthorized free services on the Net.

Music piracy has run rampant since the debut of Napster, a free service that let users search for and copy songs from one another’s computers. Other than EMI, however, the major record companies have been slow to support legitimate online subscription services.

The labels also have insisted on distributing music with electronic locks that make it difficult, if not impossible, for consumers to move the songs out of their computers and into their cars, living rooms and portable devices. Furthermore, the subscription services did not allow consumers to keep playing music after their subscriptions expired. In essence, they were renting music.

The one exception has been Pressplay, a joint venture of Universal Music Group and Sony Music that lets subscribers burn 20% of the songs they download. But only a portion of the songs in Pressplay’s catalog, which includes music from Universal, Sony and EMI, are eligible for burning.

Matt Smith, a vice president of marketing at Redwood City, Calif.-based Liquid Audio, said his company was poised last year to jump into the music-rental business. But it held off, he said, because “we just didn’t believe consumers were going to buy off on that.... It’s too big a leap for consumers to make.”

In particular, he said, the company didn’t want complex and confusing rules for what subscribers could and couldn’t do with the music in their digital collections. So it sought licenses from the major labels to offer songs that never expired, that could be burned onto CDs and that could be downloaded as easily as the songs on the unauthorized services.

Sean Ryan, chief executive at Listen.com in San Francisco, agreed that burning is a big factor in consumer acceptance. What’s holding the labels back, he said, is “the hope for a magical secure CD.”

Roxio plans to offer a premium version of its Rhapsody music-on-demand service next month that will enable subscribers to burn tracks from Naxos’ classical music catalog. Ryan said other labels are likely to support this approach--letting online music subscribers burn songs onto CDs for an extra fee--although the price and other terms are still subject to debate.

While the major labels have been willing to let consumers rent a hundred or more songs per month for the price of a single CD, they’re unwilling to back a high-volume, low-price approach to burning. Nor are they willing to have online offers compete with brand new releases--according to Hughes, new Christian titles probably will wait 90 days before being available on BurnItFirst.

Analyst P.J. McNealy of GartnerG2, a technology research firm, has criticized the major labels for imposing restrictions on online music services that make them unappealing to consumers. BurnItFirst, he said, is “certainly a step in the right direction, and hopefully an evolutionary step they’ll follow with the rest of their catalog.”

Samit said EMI will see how consumers respond to BurnItFirst before deciding whether to expand its offering. But what the company really wants, he said, is a way to let consumers burn songs onto CDs that cannot be copied.