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UK music retailer HMV is to ditch its digital music partner Loudeye subsidiary OD2 in favour of MusicNet, it emerged last night.

HMV announced a massive relaunch of its digital download store last December. The retailer vowed to spend £10m in a bid to catch up with higher-profile providers like Apple's iTunes, Napster, Woolworths and Tesco.

It said it would re-launch its service in the second half of the year. What's new is that the content will come from MusicNet rather than HMV's current content supplier, OD2.

The deal was struck with MusicNet's European operation, which launched just over a year ago. Globally, the company has content deals with AOL, RCN Music, FYE, C Trax and Virgin Digital. The latter is expected to come to the UK at some point, a move that could well see OD2 lose a second major UK retail partner. The company's European strategy has been to focus on big-brand partners strongly associated with music.

Still, OD2 is left with a bigger tally of European music outlets than its rival. The company distributes content around Europe for MyCokeMusic, MSN, the Ministry of Sound, Packard Bell, and ISPs Tiscali and Wannadoo, among others.

As before, HMV's revived download service will offer Windows Media tracks, so there's no iPod support. With iTunes so well established, that's less of an issue, leaving HMV fighting it out with Napster, Tesco, Woolworths, Wippit and all the others trying to win the other half of the UK music download market.

HMV's strength is its retail presence and branding. But its digital download efforts to date have been perfunctory and poorly promoted. To build its presence, HMV plans to tout the service in its stores, where it will sell compatible music players and distribute the store-access software, provided by MusicNet. ®

Related stories

Institutions pour $25.2m into digital music firm
HMV to spend £10m to catch up with Napster, Apple
Tesco opens digital music store
Woolworths to take on Apple iTunes store
Peter Gabriel sells digital music firm
MusicNet to deliver music downloads to UK

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