BMG GETS OUT OF GETMUSIC
While details of the negotiations were sketchy, highly placed industry sources have called it a "done deal" which could be done within the next 24 hours.
Universal Music Group is the music division of French media giant Vivendi Universal.
The site, whose number of visitors almost doubled to 1.49 million a month between September 2000 and January 2001, offers songs, music videos and interviews with artists.
Selling out would relieve BMG of its obligation to continue funding GetMusic over the next several years. So far the two companies have invested less than $50 million on the venture. Inside sources say the move is part of an overall plan for Bertelsmann's Thomas Middelhoff and Vivendi Universal's Jean-Marie Messier, who are good friends, to begin dividing up their common interests, since they will be competing against one another in several areas. Messier reportedly approached Middelhoff last fall about buying out BMG's share of the venture.
This news comes on the heels of Middelhoff stepping down from the Vivendi Universal board yesterday (see hitsdailydouble.com, 3/14).
Sources claim the two companies are taking divergent paths in the area of online music, with Bertelsmann favoring Napster-like community and Vivendi Universal pointed more towards creating and then syndicating content.
A Getmusic.com insider pointed to the departure of BMG's Strauss Zelnick and Kevin Conroy last year as a turning point in its relationship with the company. "It's an amicable divorce. If the deal goes through, we are very proud to be part of the #1 music company on the planet," said the source. "We are fully prepared to continue as part of this joint venture even if it doesn't happen, but I think both sides want to get the deal done quickly and move on."
About how Getmusic.com would co-exist with Universal's Farmclub.com, an insider said, "We have different audiences... There's very little overlap between the two sites."
