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MP3.com tunes Tower Records customers into its service

Online CD buyers will soon get instant gratification under a deal between the music start-up and retailer.

Online CD buyers will soon get instant gratification under a deal announced Wednesday between music start-up MP3.com and retailer Tower Records.

By the first week in January, customers who order a CD through TowerRecords.com will be able to immediately listen to their purchases online using a password account via MP3.com's music locker service, My.MP3.com.

Previously, My.MP3.com customers were required to have a physical copy of a CD before they could gain online access to those songs, which through the service become available in streaming format from any computer.

The pact marks MP3.com's first partnership with a major music retailer and is aimed at boosting its My.MP3.com service, which has been hampered by legal problems and doubts about its long-term commercial viability. The deal also gives Tower Records a leg up in selling CDs via the Web.

CDs bought through MP3.com's instant listening partners, including TowerRecords.com, JungleJeff.com, Duffelbag.com and Cheap-CDs, do not count toward the 25 CD limit recently placed on free My.MP3.com accounts. Consumers can add an unlimited number of discs purchased through these MP3.com partners and still remain in the free service.

"We believe this partnership potentially represents the future of music retailing," MP3.com chief executive Michael Robertson said in a statement.

Tower Records said it eventually plans to offer a similar service for in-store purchases.

The partnership announcement comes a day after MP3.com relaunched its locker service. Now consumers can opt for a free, advertising-based service that allows for the storage of up to 25 CDs, or they can pay $49.95 annually for the right to store up to 500 CDs online.

My.MP3.com was shut down in May after a federal court held that a database of nearly 80,000 songs copied and stored by MP3.com--a central part of the service--violated copyright law. MP3.com was later ordered to pay damages.

With the relaunched My.MP3.com service, consumers will be able to store only the songs contained in the company's licensing catalog, which includes the complete music listings from all five major record labels: Bertelsmann's BMG Entertainment, EMI Recorded Music, Sony Music Group, Seagram's Universal Music Group and Warner Music Group.

"Keep in mind that currently there is no other company on this planet that has agreements with all five labels and the publishers," said an MP3.com representative. "On our site alone we've got over 750,000 songs and audio files from 109,000 artists."

Analysts say that MP3.com is clearly taking proactive steps to maintain a leadership position in the legal online music market.

This market gained a major boost after the embattled Napster, a file-swapping start-up, took steps to go straight by partnering with the German media conglomerate Bertelsmann. Although the service still faces a potential court-ordered shutdown over alleged copyright infringement, the two companies promised to come out with a legal, subscription-based music service.

Online music sales have been bolstered by the pending sale of Scour, an online file-swapping service that has also faced copyright suits. This sale is expected to be completed Dec. 12.