Monday, October 10, 2005

MSN to Offer RealNetworks' Music Subscription service

Microsoft and RealNetworks announced a settlement in their long-running legal dispute, with Microsoft agreeing to pay Real a $460 million up-front cash payment to resolve all damages claims and a series of technology licenses and commitments under which Real will obtain long-term access to important Windows Media technologies that will enhance Real's media software solutions.

The companies also announced a music and games distribution agreement under which Microsoft will pay $301 million in cash to Real and provide services over 18 months in support of Real's product development, distribution, and promotional activities.

The music collaboration agreement includes the following elements:

  • MSN Messenger users will be able to share and play music while
    chatting, from the library of over 1 million songs in Rhapsody, in a
    convenient and legal way;

  • MSN Search will use Rhapsody's critically acclaimed music editorial catalogue to help users find the music they love and to discover new artists;

  • The two companies will jointly develop and implement a search integration plan which will enable Real's customers to easily use MSN
    Search within RealPlayer;

  • MSN Search will feature Rhapsody links to music in music related search results;

  • The agreement enables Real to purchase advertising on MSN Search and on the MSN Network to promote Rhapsody;

  • Both companies will promote the use of Windows Media portable devices for use with Rhapsody to Go.

Additionally, Microsoft and Real will collaborate in the casual games arena. Real will also develop a series of new casual games for Xbox Live Arcade for Xbox 360.

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