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Universal Music to Offer Album Downloads on EMusic
July 09, 2002 12:04 AM ET
 

By Ben Berkowitz

LOS ANGELES (Reuters) - The music arm of struggling media conglomerate Vivendi Universal EAUG.PA V.N on Tuesday said it would work with the company's digital music operation to offer subscription music downloads.

Universal Music Group, the world's largest music company, said it would offer the content of about 1,000 of its albums, primarily from its back catalog, through EMusic.com, a unit of Vivendi Universal Net USA.

Among the artists included in the new licensing program were B.B. King, Jimmy Buffett, the Four Tops, Joe Cocker, Ringo Starr and Stevie Wonder.

"It's the sort of stuff that has trouble getting into the rack these days," said Larry Kenswil, president of the eLabs division of Universal Music Group. "It's stuff that deserves to find a broader audience."

The titles from Universal Music would be integrated into EMusic's service, which offers unlimited access to over 200,000 songs in the standard MP3 format for anywhere from $9.99 to $14.99 per month.

EMusic subscribers gain full rights to burn the files they have downloaded onto CDs or to transfer them to portable music players, as opposed to some other subscription music services, which place restrictions on how and where the files can be transferred and used.

Vivendi has claimed as many as 50,000 subscribers for EMusic, which competes with other online services like FullAudio, Rhapsody, Liquid Audio Inc. LQID.O , Pressplay and MusicNet.

Rhapsody is a service of Listen.com. FullAudio is privately held. MusicNet is a joint venture of AOL Time Warner Inc. AOL.N , Bertelsmann AG BERT.UL , EMI Group EMI.L and RealNetworks Inc. RNWK.O , while Pressplay is a joint venture of Vivendi and Sony Corp. 6758.T

DEALS LICENSED ELSEWHERE

The deal comes as Vivendi, which forced out Chief Executive Jean-Marie Messier last week, works to address a squeeze on liquidity and a crisis in investor confidence that caused the shares to plummet.

The company said on Monday it was close to a deal with its banks for short-term financing, but it was also widely expected to pursue sales of some assets once the new financing is in place, with Universal Music Group possibly one of the properties under consideration for sale.

The new downloads agreement comes as the music industry is scrambling to find ways to keep consumers from downloading music from free online peer-to-peer services, which the major labels have claimed are undermining their business.

"Like the rest of the business, the challenge is to figure out what to do in light of the illicit free services that are out there," Kenswil said. "The jury's out as to what happens next."

Besides its own EMusic and Pressplay services, Universal Music has also licensed tracks to Rhapsody.

Kenswil said the company is not concerned about the various services to which it licenses taking business away from each other, and instead thinks the competition among the digital music services is good for the industry.

"I do think that for there to be any (in the future) there have got to be a lot of them now," he said.


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