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— 5:50 AM on April 3, 2001

On the eve of a Senate hearing aiming to determine if the recording industry has been withholding content from digital music companies, AOL Time Warner, EMI, and Bertlesmann have jumped into bed with RealNetworks' MusicNet service.

EMI, AOL Time Warner, and Bertlesmann have each licensed their content to a new subcription-based streaming and downloading service called MusicNet, which will be available to consumers through RealNetworks and America Online later this year.

The company will act as a clearinghouse for the record labels' digital content, licensing its subscription services to other businesses looking to sell music. Conspicuously absent from the deal were Universal/Vivendi and Sony, which announced their own joint subscription service called Duet earlier in the year.

What's interesting here is that Bertlesmann, the money behind Napster, is in on the MusicNet deal. A smart move on their part as it appears that Napster will become far less of a compelling option for the distribution of legal material in the future. Check out the full story at Wired.
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