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N2K deals with Disney, ABC

The music retailer inks deals with Disney.com, ABC.com, and ABC Radio Networks, but faces a class action lawsuit as well.

N2K's Music Boulevard garnered more valuable real estate in the ongoing Net music retail war today by inking e-commerce and marketing deals with Buena Vista Internet Group for its properties Disney.com and ABC.com as well as the ABC Radio Networks.

As reported last week, the Disney music alliance had been soft-launched earlier.

Under the terms of the deal, Music Boulevard will be the exclusive online music retailer of Disney music on Disney.com's Shop channel as well as within other areas on the site.

For Disney's part, the deal represents another move in the firm's recent Net push. Earlier this month, Disney bought a 43 percent stake in portal Infoseek. And last week, it introduced Dig, a children's search engine, in an effort to compete with offerings for young surfers such as Yahoo's Yahooligans.

Music Boulevard also will be the exclusive music retailer on ABC.com. Users can read about the network's music specials such as the American Music Awards and the In Concert series, listen to audio clips, read artist discographies, and buy music by clicking on links that will lead them to corresponding Music Boulevard pages, the firms said.

Financial terms of the deals were not disclosed. Music Boulevard will handle fulfillment of the music purchases from Disney.com and ABC.com.

Also, ABC Radio Networks and the Music Boulevard Network will codevelop a network of Web sites for ABC Radio Networks and ABC Radio stations that will integrate Music Boulevard's online music content and retailing capabilities, the firms said.

Net music retailers are locked in a battle for distribution to put their brands in front of as many Netizens as possible. Although analysts project the market will take off, online sales currently represent only a fraction of overall music sales. With the industry's traditional low margins for sales combined with Net retailers' attempts to gain market share by offering free shipping and other discounts, the winners in the end might be the players that can stick out losses the longest.

And the news is not all good for N2K of late: A class action lawsuit is pending against the firm. The suit, filed in U.S. District Court for the Southern District of New York in May, alleges that the firm failed to disclose financial results for the quarter that ended March 31, 1998, in its filing for a secondary public offering.

The secondary offering of more than 3 million shares took place between April 14, 1998 and April 23, 1998, according to Rabin & Peckel, the firm that filed the suit. According to Securities and Exchange Commission filings, N2K reported a net loss of $13,704,266 for the quarter. N2K declined to comment on the lawsuit.