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Vivendi units harmonize in digital deal

Vivendi Universal-owned EMusic says that Universal Music Group will add albums from its back catalog to the download service.

Vivendi Universal-owned EMusic said Tuesday that Universal Music Group will add albums from its back catalog to the download service.

Under the agreement, EMusic will include 1,000 albums from its corporate cousin in its digital music service. The songs will come from the label's back catalog, which includes artists Aretha Franklin, Elton John, Eric Clapton, The Judds and Sonic Youth.

The announcement comes as a slew of online music services court the Big Five record labels: Universal, Bertelsmann's BMG Entertainment, AOL Time Warner's Warner Music Group, Sony Music Entertainment and EMI Recorded Music. Analysts said collaborating with the major record labels is key to attracting consumers to paid services. Last week, Listen.com leapfrogged its rivals by announcing it had landed licenses from all major labels.

"In terms of what the music labels are doing, it's certainly encouraging that they're exploring their options in terms of making more music available via the Internet," said Susan Kevorkian, a research analyst at Framingham, Mass.-based IDC. For the paid online music services, "what's crucial is to provide as comprehensive a selection of music as possible from as many sources as possible."

Kevorkian added that the distribution deal between EMusic and Universal is a "natural partnership" because the label's parent, Vivendi, bought EMusic a little over a year ago. She said Universal has been more active than some labels in putting its music online, likely in a bid to hold on to its leading market share in the industry.

"In terms of developing the market for paid online-music distribution, it certainly is encouraging that the largest of the labels are developing their strategy more actively," Kevorkian said. "It's good for consumers in the long run."

The distribution deal also is part of Universal's ongoing effort to sway music fans to legitimate online services. The label said it hopes to strike similar agreements with other subscription services.

"We hope our experiment with EMusic will help us generate new interest in these titles, while offering a great opportunity for us to give consumers some flexibility," Larry Kenswil, Universal's eLabs president, said in a statement. "There is clearly huge demand for music delivered digitally, and we want to support as many innovative online music services as possible."

The move to bolster paid services is one of several attempts by the record industry to cut into the widespread use of free file-swapping networks. The International Federation of the Phonographic Industry, a lobbying group for the recording industry, estimated that in May 2002, there were approximately 3 million people and 500 million files available for copying at any one time on all of the peer-to-peer services worldwide.

EMusic said the addition of Universal music brings its music catalog to about 230,000 songs. EMusic said subscribers can burn the tracks to CDs or transfer them to portable MP3 audio players such as the Sonicblue Rio and Apple Computer's iPod.