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RIM delves into music sharing with launch of BBM Music

Research In Motion Ltd. (RIM-T) is launching a music-sharing service aimed at boosting its sagging fortunes in the consumer smart phone market and capitalizing on the runaway success of BlackBerry Messenger.

RIM will launch the public beta version of BBM Music on Thursday in Canada, Britain and the United States, a prelude to a full launch in 15 countries before the end of the year. The service is essentially a BlackBerry-based music rental service, built with a heavy social component.

"It's got a pulse," said Alistair Mitchell, RIM's vice-president in charge of the BBM platform and integrated services. "It's a living, breathing music discovery service."

The new service - one of RIM's most ambitious app-development projects - makes its debut as the company tries to build an arsenal of compelling software services for consumers, in an attempt to regain market share it has lost to Apple Inc. and Samsung Electronics Co. Ltd. The move also comes ahead of RIM's launch next year of an entirely new line of BlackBerrys running on a new operating system, called QNX.

Under the terms of RIM's deal with several major record labels, BBM Music users will pay a monthly subscription fee ($5 in the United States; pricing for other countries has yet to be announced) for access to a catalogue of roughly 10 million songs. Each user gets to pick 50 songs to form a personal play list, and can swap up to 25 songs in and out of that list every month. They can then listen to any of those songs, as well as any music on any of their friends' play lists, as often as they like.

Users will not own any of the music, and won't be able to transfer tracks to other media, such as hard drives or MP3 players.

The terms of RIM's agreement with the major record labels reflect the concerns of those in the music industry over such music-streaming services and RIM's own desire to make its service as social as possible. Traditionally, record labels have been wary of signing deals with online music services, fearing that they will cannibalize their traditional revenue sources.

Deals that cover multiple countries have been particularly difficult to arrange, and as a consequence, wildly popular music services such as Pandora, an online Web radio and music recommendation service, are largely inaccessible outside the United States.

For RIM, the design of BBM Music is clearly designed to encourage users to amass more friends and become more connected through their smart phones, in the process making the BlackBerry more alluring to new and existing users.

Currently, BlackBerry Messenger has about 45 million users, and is frequently listed as the No. 1 reason many new customers - especially teenagers - opt for BlackBerrys. Even as RIM loses market share in some consumer markets, such as North America, BBM use is soaring.

Until now, the allure of BBM was its low cost. Users saw it as a much cheaper means of sending text messages on their phones. But with a number of third-party developers building BBM-like apps for multiple smart phone platforms, and Apple's attempt to do the same for iPhones, RIM's software will likely have much stiffer competition in the coming months.

BBM Music will also likely face significant competition. Although the business models can differ greatly, services such as Pandora and Slacker Radio have focused much of their recent development work on distributing their products through smart phones such as Apple's iPhone. Stingray Digital, the company behind the Galaxie music stations on Canadian cable TV, recently announced a subscription-based music service for smart phones.

In a crowded marketplace, RIM's advantage lies in the social aspect of its service. The company hopes the music service will help it gain revenue from its most successful smart phone application, as well as convince BlackBerry developers to integrate more BBM functions in their own apps.

"BBM's great strength is around relationships," Mitchell said. "If we can transpose that to music, it can be a very rich experience."

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