The purchase of San Francisco-based Mjuice will help Artistdirect offer more music in the popular MP3 audio format, the company said. Mjuice has more than 30,000 secure MP3 music tracks from more than 70 record labels in its database.
Mjuice chief executive Arnold Brown will become vice president of digital distribution for Artistdirect. Mjuice's staff will remain in San Francisco.
Financial terms of the deal were not disclosed.
The acquisition comes as Artistdirect prepares an initial public offering. The company already has gained financial backing to the tune of $97.5 million, including investments from four of the "Big Five" record labels: Sony Music Entertainment, Universal Music Group, BMG Entertainment and Warner Music Group. EMI Recorded Music does not have a stake in Artistdirect.
The investment round also included Web portal Yahoo and Latin American media company Cisneros Group.
Artistdirect aims to become a hub for music downloads, artist information and music industry news. It is betting on the surging popularity of online music, which has caused concern among the major record labels and has sent them scrambling to create their own strategies to capture the growing market.
Artistdirect offers information such as tour dates and facts about popular recording artists. The company also develops home pages for artists, such as the Beastie Boys, Aerosmith, Korn and Pearl Jam, and gives artists stakes in e-commerce sales.