Matsushita confirms Universal digital music deal

Universal has formed a pact with AT&T, Matsushita and Bertelsmann Music Group (BMG) to combine their online music distribution efforts, Matsushita said admitted today. The tie-in was predicted by The Register earlier this month. The deal will combine Universal's digital music distribution efforts and its artist roster with BMG's own back-catalogue (both BMG and Universal, formerly known as Polygram, are two of the world's 'big five' music labels), AT&T's cable network and Matsushita's consumer electronics divisions. That puts the combined enterprise ahead of other players in the game. Sony's tie-in with IBM, for example, is comparable but lacks the distribution channel that AT&T brings to the Universal team. AT&T gets something out of the deal: possible support for its ailing a2b music format. Despite AT&T assurance to the contrary, the format's future remains in doubt ever since half of the division that develops it jumped ship for Microsoft-backed Reciprocal. Universal has publicly said it will begin offering a full online music service by the end of the year. Sony, meanwhile, will begin a more basic, singles-oriented scheme in the summer. ®