Universal, BMG Form Joint Venture

Music-industry giant BMG Entertainment, New York, and Universal Music Group, Los Angeles, have formed a joint venture for selling recorded music online that is expected to greatly expand BMG's current efforts on the World Wide Web and enhance both companies' direct-to-consumer electronic marketing prowess.

The terms of the 50-50 joint venture, called GetMusic, were not disclosed. BMG, a division of German media conglomerate Bertelsmann NV, already sells recorded music at www.getmusic.com, which customers can access from five genre-specific sites.

A spokesman for BMG said he did not have any figures available for the sales volume or the number of customers the site as served. He did say, however, that the site has been capturing e-mails through an optional registration vehicle that offers the promise of receiving news and information about the music industry. Each of the genre sites also has a registration area for capturing e-mails, which BMG uses to notify registrants about new album releases and “inside” information about artists within that genre.

Under the terms of the new joint venture, Universal, a unit of global conglomerate Seagram Co. Ltd., will incorporate information about the artists on its recording labels on the genre sites and will work with BMG to add additional sites focusing on specific types of music.

The genre-specific online communities will include video and audio clips, interviews with artists, biographical information, contests, news, live concert broadcasts and other features, such as horoscopes and interviews with professional athletes and movie stars. The sites include: Peeps Republic (www.peeps.com), BUGjuice (www.bugjuice.com), Twang This! (www.twangthis.com), Rock Universe (www.rockuniverse.com) and Connect2Music (www.connect2music).

“This venture will significantly expand the bridge we have been building over the past three years between artists and their fans,” said Kevin Conroy, senior vice president for worldwide marketing at BMG, in a prepared statement.

BMG and Universal said they would employ a variety of marketing tools to promote the sites, including print and broadcast advertising, printing Web addresses on compact disks, special events and “connected CDs” that will link directly to the sites when inserted into a computer. Consumers will have the option of ordering music albums directly through the Internet or searching for nearby retail outlets.

The new venture will compete with such established Internet sellers as Amazon.com, which is the largest online music retailer. Other online music sellers include CDnow and N2K, which have agreed to merge, and Total E, which is run by the Columbia House music club. Other sites also are expected soon from MTV parent Viacom Inc. and music retailer Virgin Entertainment Group.

Bill Curry, a spokesman for Amazon.com, which is the largest Internet retailer of recorded music, declined to comment specifically on the new competition.

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