MusicNet names MTV veteran as CEO

posted onOctober 23, 2001

by hitbsecnews

LOS ANGELES--MusicNet on Tuesday named MTV executive Alan McGlade to head the online music service at a time when both the venture and rival service Pressplay have come under increased scrutiny by government antitrust regulators.

"It's not uncommon for the government to look into joint ventures within an industry, particularly in an emerging business," said McGlade, addressing the issue head-on in his first interview as chief executive and president of MusicNet, which is comprised of RealNetworks, AOL Time Warner's Warner Music, EMI and Bertelsmann's BMG.

"We'll cooperate fully with the Justice Department, but I'm confident (it will find) that we're pro-consumer and pro-business," he said.

Last week the U.S. Justice Department expanded its antitrust probe into online music business practices by sending civil subpoenas across the industry focusing on alleged use of copyright rules and licensing practices to control distribution.

The probe, first launched last summer, is focusing largely on MusicNet and Pressplay, owned by Vivendi's Universal Music and Sony Music.

The planned launch of these services this fall comes after the recording industry mounted several high-profile copyright lawsuits against services such as the once wildly popular Napster, which has stood idle since July as a result of the litigation.

Both services hope to capitalize on the strong demand for online music that was demonstrated by Napster in its heyday.

But several smaller online music companies, also trying to jump into the space, claim the big labels have refused to license their music to them as they have worked on developing these services.

The Justice Department is trying to determine if the industry has colluded illegally to set rates and terms for use of its music as it sets out to launch online services, industry sources said.

"There is a real misnomer out there," said Rob Glaser, chief executive of RealNetworks, who is chairman of MusicNet and who had been acting as the venture's interim CEO.

"The reality is that we're (online music industry) in a transition state and we're the first to be getting into a business for consumers with major label content," he said.

At least one music giant, EMI, has already licensed much of its music to start-ups such as FullAudio and Streamwave.

MusicNet officials expect more deals like this in the future. "I think as we make MusicNet a success, we'll act as a market enablers and a catalyst for many people to participate on many levels," Glaser said.

As president and chief executive officer, McGlade will oversee development and deployment of the service, which is expected to launch to consumers via distribution partners AOL and RealNetworks this fall. RealNetworks on Monday said it would launch MusicNet in November.

McGlade will oversee programming, distribution and content relations, operations, and all technology initiatives for the service.

MusicNet will be headquartered in New York, and the technology development and operations teams will remain in Seattle. McGlade will also serve on the MusicNet board of directors.

"There couldn't be a more exciting time for the music industry as MusicNet charts the course in the emerging era of digital music," McGlade said.

Prior to joining MusicNet, he was president and chief executive of The Box Music Network, an interactive music television network within the MTV Networks family. MTV is owned by Viacom.

After joining The Box in 1995, McGlade expanded the network to more than 40 million households and then merged it with MTV2 to create a widely distributed, companion interactive music channel to MTV.

During his tenure at The Box, McGlade oversaw the development of The Box's suite of six digital video channels, as well as the launch of The Box Online, a service for ordering music videos through an Internet gateway, as well as via phone, for playback on television.