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Seagram's Bronfman weighs in on merger trend

Chief executive Edgar Bronfman Jr. says the company's Universal Music Group will launch a secure music download format as Seagram tries to reposition itself for the so-called Internet Age.

NEW YORK--The proposed merger between America Online and Time Warner has forced all major media companies to reevaluate their businesses for the so-called Internet Age--and that includes Seagram, according to its chief executive, Edgar Bronfman Jr.

"We continue to have conversations with lots of companies to figure out how we can advance our business into the new world," Bronfman said during his keynote address at the Jupiter Communications Consumer Online Forum in New York.

To that end, Seagram's Universal Music Group plans to launch a secure download format this spring, he said. The service will be featured on Global E, the company's music download destination, and will allow users to download and listen to songs recorded on Universal-owned labels.

"Initially, we'll offer a relatively small number of tracks, but we will build our offering over time so that eventually it encompasses the lion's share of Universal's catalog," Bronfman said.

Seagram's digital download format is being created in collaboration with InterTrust Technologies and Magex, according to a Seagram spokeswoman. InterTrust develops digital rights management technology, and Magex, which uses InterTrust, further secures payment online, acting as a key for unlocking files--in this case, digital music files.

The move comes after rival label EMI Recorded Music announced it will open its music catalog to allow downloads. EMI is planning to merge with Time Warner, creating a $20 billion music powerhouse.

Bronfman's announcement also comes amid speculation that Seagram is considering a sale of its company. Suitors rumored to be interested in the Canadian distiller and entertainment giant include Rupert Murdoch's News Corp. and French utilities and communications company Vivendi.

Bronfman declined to comment on the rumors, saying only that he intends on running the company for a "very long time."

Nevertheless, the chief executive You've got Time Warnerjumped on the opportunity to poke fun at the speculation.

"I am unable to announce today our much-rumored business combination with News Corp., AT&T, and also Viacom, Disney, Bertelsmann, Yahoo, Vivendi, USA Networks, NBC, Sony, Microsoft or any Paul Allen-affiliated company," Bronfman joked.

Industry-wide, speculation has heightened that other traditional media outlets are looking for online partners to compete with AOL Time Warner. News Corp. and Web giant Yahoo are the latest considering an alliance, according to reports. The companies are said to have been in talks for Yahoo to receive placement in the media company's satellite division and for News Corp. to distribute its news and information on Yahoo sites.