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Microsoft Co-Founds Music Service

It's teaming with a British digital music provider to launch the first pan-European online music service.
BRUSSELS, Belgium (AP) - Microsoft Corp. and a British digital music provider teamed Thursday to launch the first pan-European service selling songs over the Internet on a pay-as-you-go basis, following on the success of Apple's iTunes Music Store and other services in the United States.

London-based On Demand Distribution (OD2) has the largest catalogue of legal digital music in Europe--more than 200,000 tracks from 8,500 artists on all five major labels, plus a slew of independents.

Europeans will be able to download songs starting at 99 euro cents ($1.12) each--without subscription fees--through the MSN Music Club or Tiscali Music Club using Microsoft's Windows Media Player 9 technology.

While welcoming the increased choice for music lovers, European Union regulators said the news bolsters their antitrust case against the U.S. software giant. Just last week, the EU accused Microsoft of trying to squash competing audiovisual software by including its Media Player with the Windows desktop system.

It is demanding Microsoft either produce a version of Windows without the Media Player or incorporate rival programs into the package.

"We like that the European consumer now has access to songs for 99 cents," said EU spokesman Tilman Lueder. But, he added, the deal "reinforces the impression" that businesses are designing services for Microsoft's Media Player because of its ubiquity.

"This shows how important it is to have your particular media player software linked to the dominant desktop," Lueder said.

The MSN service will be available in English, French, and German, while Tiscali operates in Britain, France, Germany, Italy, Spain, and Belgium. Customers will be able to download tracks, play them and store them on their computer, portable devices or burn them onto CDs.

OD2's catalog is about the same size as that of Apple's iTunes, which debuted in April and so far has been the only service to enable customers to burn the songs they buy to CDs virtually without restriction.

But the music licensing deals behind iTunes and other U.S. online services, including MusicNet and Rhapsody, dictate U.S. sales only because of the difficulty in ensuring that everyone gets fairly paid.