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EMI Signs European Digital Music Distribution Agreement

[London, ENGLAND] Record company EMI Group, in the financial pages Tuesday for reporting a six-month loss of US $44.6 million to end September, has announced a strategic agreement with European digital music distributor DX3 Ltd.

EMI's digital download trial in North America launched in July and is only now being extended to Europe. When it does, DX3 will provide selected e-tailers with encoding, hosting digital rights management, reporting and delivery of digital downloads.

The announcement is a further indication that EMI is set to enter a new era of music production and distribution, coming amid reports that it may merge with Bertelsmann AG's music business to create the world's largest record company.

Jay Samit, senior vice president, new media, at EMI Recorded Music, called the deal an important step in EMI's plan to roll out digital downloading in Europe.

Speaking for DX3, Chief Executive David Stockley said his company's aim was to use the relationship with EMI to accelerate the expansion of DX3.

"EMI's recognition of DX3 as a key player in the European digital services market will further strengthen our drive to become a major force worldwide in the secure digital delivery of music and entertainment content."

Headquartered in London, DX3 also has a presence in Stockholm and New York. It was founded in 1999 and claims to have become one of Europe's top business-to-business digital distribution companies for music content since that time.

However, with Tuesday's dramatic news of EMI's financial woes, DX3 could find itself dealing with a much larger company if the merger with Bertelsmann goes ahead.

Most of EMI's losses step from the costs of its abortive merger attempt with Time Warner's music unit.

Currently the third largest music company in the world, EMI Recorded Music publishes 1,500 artists across every genre of music, from jazz and pop to Latin, Christian, country and dance. Labels include not only EMI but also Virgin, Capitol, Parlophone, Chrysalis, Priority, Blue Note and EMI Classics.