EMI takes half-share in digital music company

EMI, one of the world's 'big five' recording companies, has taken a 50 per cent stake in Musicmaker.com in exchange for the custom CD company's right to use EMI's vast back catalogue of recordings. The deal follows Sony's move earlier this week to partner with custom CD vendor Digital On Demand (see Sony brings digital music to retail channel). Musicmaker.com's allows users to create customised CDs through its Web site. Completed discs are then mailed to the buyer, or -- and this is where EMI's interest starts to become clearer -- transferred across the Net as a download. For Musicmaker.com the deal brings access to EMI's recordings archive, one of the largest in the world. Musicmaker.com offers a wide selection of tracks, but one that's by no means as extensive as a recording company's -- until now. Musicmaker has the rights to use EMI's catalogue for five years. In the meantime, EMI gets access to a site which it can use as a template for its own full-scale entry into the digital music market, probably later this year, alongside services from fellow big fivers, Universal, BMG and Sony. Now that the security issues surrounding the online market are beginning to be resolved, the music majors are going to become increasingly active in the field, driving both partnerships (like the Sony/DoD tie-in) and acquistions. It's telling that Musicmaker.com was orginally planning a $30 million IPO earlier this year, but postponed the share sale when it entered talks with EMI in April. That IPO is now back on the cards, and scheduled for later this month. ®