Universal, BMG to link to sell music online

Seagram and German media giant Bertelsmann will announce today an Internet alliance linking their music operations — Universal Music Group and BMG Entertainment — to sell releases from their record labels.

Spokesmen from U and BMG — the world’s largest record conglom and largest music club, respectively — declined to comment on details of the deal late Tuesday.

The companies will combine their e-commerce efforts to sell music online, most likely through BMG’s GetMusic.com Web site, launched at Christmas.

Announcement marks U’s first foray into selling releases from its record labels — including Def Jam Records, Geffen and A&M — on the Internet, while other competitors have been doing so since last year. U became the world’s largest music organization, last year, when parent Seagram Co. purchased PolyGram for $10.4 billion.

TWE.com bowed

Retailer TransWorld Entertainment, the industry’s second largest music retailer, last year bowed TWE.com, joining outfits like Tower Records on the Web.

Columbia House, the music club owned by Sony and Warner Music, bowed Total E earlier last year to offer CDs directly to consumers.

The announcement, heralded as a “major Internet announcement in the media business,” was to be made this morning during a press conference in New York City, involving chief executives from both companies.

BMG, a unit of German media empire Bertelsmann AG, is the operator of the world’s largest music club and also owns more than 200 record labels in 53 countries, including Arista Records, RCA Records and Windham Hill.

BMG Online formed

The company launched GetMusic.com, to sell albums from artists on labels across the conglom’s family. Site is run by BMG Online, a recently formed outfit charged with overseeing the conglom’s Internet activities, and headed by BMG senior veep Kevin Conroy and BMG Online veep/G.M. Elizabeth Schimel.

BMG also operates a trio of genre-specific sites, including Bug Juice, which highlights alternative rock acts and Twang This, a site that showcases the conglom’s country music acts. It also has plans to launch classical, adult contemporary and classic rock sites, as well. The sites are linked with the e-commerce store.

Speculation surrounding today’s news conference initially centered on Internet giant America Online and CBS, and sent the Eye’s stock skyrocketing. Shares of CBS ended up $1.81 to close at $43.69, but not before reaching a 52-week high of $45.19. AOL was up 56¢, closing at $167.50.

Although both companies declined to comment on the rumors, a spokesperson for AOL said it did not have an announcement planned for today.

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