A Sony Music spokeswoman also confirmed that the company plans to make an "equity investment" in Launch, but would not elaborate on the amount. Launch filed for an initial public offering with the Securities and Exchange Commission last month. The company hopes to raise about $40 million through the IPO.
The music site's cofounder and chief executive Dave Goldberg said he hopes to take the company public by mid-April. He also noted that Sony Music agreed to buy about $1 million in Launch shares at the time of the offering. Current private investors include GE Capital, a unit of General Electric, Intel, and NBC, among others.
Launch will acquire Sony's SW Networks, a service that provides music news and interviews with artists to radio stations across the country. The agreement also gives Launch, which broadcasts music videos over the Internet using streaming technology, license to use Sony music videos.
The battle between Internet music sites is just beginning to heat up with major players venturing online. Media giant Viacom and Rolling Stone recently upped the ante by joining the fray. Launch's agreement with Sony Music is likely to help it compete in this area. Sony also has invested in other Net music ventures, such as Net radio firm Spinner.
Goldberg said SW Networks received either cash or advertising time from radio stations in exchange for its content and would turn around to sell the advertising inventory.
"We will continue to sell [advertising time], but the unsold inventory we will use for our own promotions to drive traffic to the site," Goldberg said.
In addition to featuring well-established artists, Launch covers new musicians spanning all genres.
"Historically, the music industry and music consumers have looked to music media, such as MTV and radio, to serve as outlets for marketing and discovering new music," the company said in its filing. "However, traditional music media have increasingly de-emphasized the introduction of new music in favor of programming strategies designed to aggregate the largest possible audience for advertisers."
Launch works closely with many record labels, providing them an opportunity to market new music to a broad market that can be difficult to reach through traditional media.
Launch has featured the works of several big-name artists, including Alanis Morissette, Smashing Pumpkins, and Wyclef Jean.