The deal, which is scheduled to be announced Wednesday, will allow Loudeye to deliver Warner Music Group recordings and music videos to vendors that have licenses to distribute the label's recordings over the Web. Last month, Loudeye inked a similar deal with Seagram's Universal Music Group.
Millions of copies of songs are already freely circulating on the Internet in the unauthorized MP3 format. By partnering with Loudeye and other digital media companies, the labels hope to streamline the process of converting content into formats that can be sold online.
All of the major labels have announced online distribution plans, although none has moved beyond the experimental phase.
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, Warner Bros. Online and Universal. Wednesday's deal is its second major foray into hosting content following its agreement with Universal.
Loudeye's competitors include Sonic Foundry, which has also signed deals with big content companies including Sony, Warner Bros. and BMG Entertainment.