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ARTISTdirect secures financing from congloms

Internet music company ARTISTdirect Inc. said Wednesday it has secured $97.5 million in financing from a slew of music and media congloms including Universal Music Group, the world’s largest music company, music club BMG Entertainment, Sony Music Entertainment, Warner Music Group, online search portal Yahoo! and Cisneros Television Group.

The investment by each company includes an undisclosed minority stake in the Encino, Calif.-based company and comes during ARTISTdirect’s quiet period as it readies an IPO on Wall Street.

Increasing traffic

The licensing, marketing and distribution deals will help boost ARTISTdirect Network’s traffic numbers and music content available on its Web site, as well as push the brand on the investors’ Web sites.

In return, the major music groups’ record labels will be able to use ARTISTdirect to promote their artists online, a space that has become invaluable over the past year.

The ARTISTdirect Network operates several sites that include multimedia content, the UBL.com search engine, music news and information, and e-commerce. ARTISTdirect.com operates official Web sites for several music artists including the Backstreet Boys, Beck, Limp Bizkit, Blink 182, the Red Hot Chili Peppers, Aerosmith, the Brian Setzer Orchestra, Foo Fighters, Matchbox 20 and Metallica.

Strategic relationship

The strategic relationship with Cisneros TV Group, a leading pay television content provider in Latin America, will enable ARTISTdirect to broaden its efforts in the Spanish-speaking arena in a major way and increase its traffic in the millions through Yahoo!.

Cisneros holds a 50% stake in America Online Latin America and an interest in Spanish-language Web site El Sitio. It also operates Web site MuchMusic Argentina and HTV, the Latin music television channel with distribution throughout the U.S., Latin America, Europe and Asia. It also has rights to develop MuchMusic franchises throughout Iberoamerica.

Yahoo! currently reaches 105 million Internet users worldwide.

BMG Entertainment, a division of Bertelsmann AG, operates one of the largest music clubs and owns more than 200 record labels including Arista, RCA Records and Ariola Music.

Sony Music’s investment expands its online portfolio, which already includes stakes in AudioBase, Digital On-Demand, Intertainer, LAUNCH Media, Listen.com, OnRadio, Platform.net, Spinner.com, TalkCity and Spanish-language Web site Yupi.com.

UMG owns record labels A&M, Def Jam, Deutsche Grammophon, Geffen, Interscope, Island, MCA, Motown and Verve, among others.

Warner Music Group includes the Atlantic Group, Elektra Entertainment Group, Rhino Entertainment, Sire Records Group and Warner Bros. Records Inc.

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