Warner Inks Online Music Deal

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Warner Music Group has cut a deal with Internet start-up Lala.com to allow free music online in hopes of prodding CD sales.


Lala.com, based in Palo Alto, will make a majority of the albums in the Warner Music catalog available at its site as audio streams, which can be heard but not downloaded online a service for which Lala will pay Warner but not charge users.


Lala.com, which started by providing a medium in which music fans could trade used CDs for a fee, is hoping to make money by selling music, both in CD format and as digital files that it will make available on iTunes.


The agreement comes after New York-based Warner, which has significant operations in Burbank, announced ad revenue sharing pacts with Cambridge, Mass.-based Internet TV provider Brightcove Inc., Google Inc.’s YouTube.com and Luxemburg-based Internet TV provider Joost.com all of which will be providing Warner music video content.


Shares in Warner were flat at $16.80 in afternoon trading Tuesday on the New York Stock Exchange.

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