EMI Signs Sweetheart Deal with Musicmaker.com

The world's third largest music company has thrown its massive weight behind Internet audio. On June 10, EMI Recorded Music, a division of EMI Group Plc, announced a five-year licensing agreement with Reston, Virginia-based Musicmaker.com, a major custom CD compilation service and digital download site. EMI has not simply made its enormous catalog available to the service---it has also bought into Musicmaker.com with a 50% equity stake.

Musicmaker.com currently offers more than 20,000 licensed songs in three secure digital downloading formats: Liquid Audio, Microsoft MS Audio 4.0, and Musicmaker.com's own secure MP3 format, according to a company press release. The Secure Digital Music Initiative (SDMI), an effort to propel the industry toward a copyright solution, was launched last year in the wake of an explosion of audio activity on the Internet. Once an industry-wide copyright-secure standard is finalized, probably later this year, more than 150,000 songs will be accessible at Musicmaker.com, making it the largest music library in the world for custom compilation.

EMI is well regarded among music fans for the generally high quality of its recordings, which feature some of the biggest names in the music business. Labels under the EMI umbrella include Angel, Capitol, Blue Note, EMI, Priority, and Virgin, an array encompassing almost every genre of music: pop, rock, jazz, classical, urban, dance, Christian, and country. The company has an international reach, with operations in more than 50 countries.

The deal with Musicmaker.com will make EMI truly global by putting its products on the World Wide Web. Computer-equipped music fans in remote locations will have access to the same selections as residents of large cities. "The Internet is the ultimate means of direct marketing to the consumer," said Jay Samit, EMI's senior vice president for new media. "Musicmaker.com's expertise in this area has convinced us that they are an excellent partner for us to begin our move toward the digital delivery of music. Once the SDMI standard is established, digital downloading will offer our consumers and our artists even more opportunities."

Raju Puthukarai, president of Musicmaker.com, said, "We are pleased that our first relationship with a major music company is with EMI Recorded Music. We believe that the EMI partnership, combined with our exclusive marketing agreements with Columbia House and others, will ensure that Musicmaker.com becomes a leader in the digital distribution field. We are confident this is going to be an agreeable and fruitful relationship." Puthukarai was formerly president of RCA/BMG Music and Video Club, and president of Warner Music Media.