NEW YORK — In another move to wrap its arms around music and the Internet, Seagram’s Universal Music Group will announce today a sweeping alliance with America Online, USA Networks and MTV Networks to find and promote new talent through the Web.
The partners’ point of convergence will be a new Universal record label called Jimmy and Doug’s Farm Club — as in Jimmy Iovine, co-chairman of Interscope Geffen A&M, and Universal Music topper Doug Morris. Iovine will be tapped chairman.
A spokeswoman for Seagram declined to comment, but sources said the label, to be housed at FarmClub.com,will let unsigned artists digitally submit recordings for fans and industry execs to critique. Anyone who uploads music can compete for a major record label, and Universal Music will market and distribute selected Farm Club releases using both the Internet and traditional channels.
As part of the process, artists who turn to FarmClub.com will be in the running to appear on a new weekly TV show on USA Network. The hourlong program will follow the World Wrestling Federation’s “Raw,” the cable net’s highest-rated show. The program will be linked to the FarmClub.com Web site.
In exchange for a 3% stake, AOL will provide about $100 million in promotion for FarmClub on its welcome screen and main music sites.
The partners plan to announce the project along with more details at a press conference in New York today. Seagram CEO Edgar Bronfman Jr., Morris and Iovine are to be present, along with execs from the other companies involved.
Agreement will allow Universal Music to connect directly with music fans and will provide a new stream of revenue from advertising on FarmClub.com. It comes as Universal and all other major music companies are struggling to take a threatening new medium and turn it to their advantage, or at least stem potential losses from competition on the ‘Net, where consumers can download music for free.
Last spring, Universal teamed up with Bertelsmann’s BMG Entertainment to launch Getmusic.com, an e-commerce site that sells CDs and cassettes and directs customers to nearby retail stores. It also offers online communities and a group of sites for various music genres.
Columbia House, the Time Warner/Sony-owned venture, has agreed to buy online retailer CDNow.
Bronfman, Time Warner Chairman-CEO Gerald Levin and other execs have consistently described the new landscape as full of opportunity for the traditional music giants. The industry, they say, and their companies’ bottom lines have always benefited form technological advances in the past.
But many in the industry are worried, for obvious reasons. It seems clear the Internet will steal some business. Music companies may make it up, and in spades, with their own online ventures, but it’s not yet clear just how.
All the major music companies are involved in initiatives to prevent pirating of music sold on the Web, including the industrywide Secure Digital Music Initiative, or SDMI.