Quantcast
HITS Daily Double
"Between us and the U.S. Department of Defense, there's nobody else who comes close [to the capacity to do this]."
—Martin Tobias, CEO of Loudeye

UMG LEADS CHARGE
INTO DIGITAL WORLD

Industry Concerned By Loudeye CEO Comparing His Company To Department Of Defense
In a move viewed as advancing the major labels' foray into the digital music world, market leader Universal Music Group has reached a licensing agreement with digital media company Loudeye Technologies to digitally store and encode its entire U.S. active catalog of audio and music video titles.

In the deal, which is expected to be announced later today (9/22), Loudeye said it will begin streaming promotional audio and video clips from the Universal catalog. The company plans to eventually offer compressed versions of 14,000 Universal audio tracks and 30,000 music videos, which it will redistribute to third-party vendors, according to CNET. Terms of the deal were not disclosed.

"Between us and the U.S. Department of Defense, there's nobody else who comes close [to the capacity to do this]," quipped Martin Tobias, CEO of Loudeye.

The arrangement promises to streamline the process of creating versions of Universal tracks for online digital sales. Loudeye will provide custom formatting for vendors, including links to CD art and "metatags," which provide information about the artist and song titles for the purpose of tracking sales.

Loudeye, which went public in March, has deals to convert content for several media and entertainment companies, including AtomFilms, BMG, EMusic, EMI-Capitol Music Group, Sony and Warner Bros. Online.

The deal, Loudeye's first major foray into hosting content, is an important win for the company and signals an endorsement of digital music distribution by the record giant.

While the music industry has been slow to embrace the Internet, it has begun to move more quickly in the wake of the merger proposed in January between America Online and Time Warner. All of the major labels have announced online distribution plans, although none has moved beyond the experimental phase.

"Having Loudeye host and stream (Universal's) audio and video clips enables (Universal) to further market, promote and drive sales of our artists' music over the Internet," Larry Kenswil, President of Universal's eLabs, said in a statement.