To: Robert McHale who wrote (25538 ) 7/16/2000 10:28:04 AM From: Dealer Read Replies (1) | Respond to of 35685 RNWK--Looks like RNWK has CIA when it comes to Microsoftie. Microsoft Says EMI to Use Its Software for Web Music (Update2) By Dina Bass Redmond, Washington, July 14 (Bloomberg) -- Microsoft Corp., which is battling to replace RealNetworks Inc. as the top maker of Internet audio and video software, said EMI Group Plc will use its software to sell music on the Internet. On Tuesday, the third-largest music company will start selling online music from 80 of its artists on more than 100 compact discs and single songs. This is the largest single release of music on the Internet by a major recording company, the companies said. The music will be from artists like Tina Turner, Spice Girls and Smashing Pumpkins. Microsoft, which provides the software free, is battling RealNetworks by forming partnerships with major record companies to allow music to be distributed on the Internet using Microsoft software. The record companies have been reluctant to sell music online because of fears that consumers could copy songs without paying for them and that record stores lose some sales. EMI will also allow customers to play free samples of the songs. EMI is merging its music unit with Time Warner Inc. to form the world's biggest record company. The story was earlier reported by the Knight-Ridder News Service in the Philadelphia Inquirer. Napster London-based EMI fell 2.3 percent to 651 pence. Redmond, Washington-based Microsoft fell 1 to 78 15/16 in Nasdaq trading. Other record companies also have also begun or announced plans to sell music on line. Seagram Co. announced plans in March to begin digital downloads, Sony Corp. said in April it would begin selling music over the Web and Time Warner Inc. has said it plans to offer music on line in the second half of the year. Still, much of the music offered online consists of previews, samples and songs from artists whose careers have seen better days. Many of the EMI songs and CDs come from older musicians like Pat Benatar and Blondie, or from artists like the Spice Girls, whose popularity peaked a few years ago. For many online music collectors the record labels' efforts come too late, as thousands are already getting music free using services like Napster Inc.'s for sharing music over the Internet. Napster is being sued by the Recording Industry Association of America, whose members include Sony Corp., Bertelsmann AG and Time Warner. Napster's software works with MP3-formatted files, which are easy to copy. Microsoft's software to encode and distribute music files, on the other hand, contains technology that protects against theft and will let record companies create files that expire after a certain period of time to allow companies to offer samples and previews. Because Microsoft software is used to encode and distribute the files, customers can only listen to the songs on a software music player that licenses Microsoft technology. Microsoft's main competitor, RealNetworks, said in March it will license Microsoft software to enable it's own programs to play files created with Microsoft's product.