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Record label to sell phone service to music fans

The Universal Music Group says it has entered into a strategic alliance to sell a music-oriented cell phone service.

A major record label, the Universal Music Group, said Friday that it had entered into a strategic alliance to sell a music-oriented cell phone service.

The phones will include features that make it easier to download snippets of songs, and, eventually entire songs, according to the Universal Music Group's strategic partner, Single Touch Interactive, which works with companies to develop and package branded phone service.

Universal Music, a unit of Vivendi Universal, becomes the latest to get into the affinity phone business, joining the likes of ESPN and Walt Disney in trying to carve out a niche of customers by selling phones that focus on providing specific content.

The companies buy mobile minutes wholesale from a major national carrier, like Sprint or Cingular, and then resell that as prepaid time to their own customers. In the case of Universal Music, the company will not be operating the service, but plans to provide content to Single Touch, and to share in the revenue from minutes sold.

The emergence of a music-oriented phone service comes as the record labels, and cellular carriers, are trying to profit from selling music over mobile devices. Already, major carriers accrue tens of millions of dollars in revenue selling ring tones and short clips of songs for, typically, $1.50 to $3 a download.

Anthony Macaluso, chief executive of Single Touch, said the phone service, called MoveU, is expected to sell entire songs eventually- once the phones are able to store and process the information, and the digital rights management issues are resolved.

As soon as the device is able to support full-length downloads and the pricing is right, the company will be there, he said.

The Universal Music Group said it was not obligated at this time to provide full-length tracks for download.

Macaluso said the service would probably rely on phones from LG or Samsung that would sell at retail for $99 to $149. He said the service would offer downloads of ring tones for $1.99 to $2.49 and was considering selling a $9.95 monthly subscription for access to longer clips of a large catalog of songs.

This week, Sprint said that it planned to offer a music download service by the end of the year that would allow consumers to buy full songs. An executive briefed on Sprint's plans said two companies, Sony BMG Music Entertainment and EMI, had signed agreements with Sprint to sell songs for mobile download.