RealTime IT News

Loudeye Scores Pact to Supply Music Samples to AOL

Loudeye Technologies Inc. is beginning to see a payoff in its revamped strategy of providing digital music archiving and distribution.

In April, the Seattle, Wash.-based company announced its plans to concentrate on its business of providing infrastructure technology to enable delivery of digital music.

On Wednesday, Loudeye announced an agreement with their newest client -- AOL Time Warner. Its stock shot through the roof, up 50 cents or 46 percent at $1.58, though it still stands well below its all-time high of $23.88.

Loudeye was founded in 1997 as an encoding company to help customers (mainly media companies) transform their analog content into digital. But as the media companies demanded greater infrastructure services to deliver digital content, Loudeye branched out into ASP businesses.

The company shored up the agreements necessary with the likes of BMG Music, EMI, Sony, and Universal Music Group and began supplying the record labels' music samples to a slew of customers like Amazon, Barnsandnoble.com, CNN, etc. To complement the music sampling business, Loudeye also bought the assets of OnAir Streaming Networks, a developer of online radio applications, and earlier this year acquired DiscoverMusic, a sample provider that also had an arsenal of album cover art and data to support online music retailers.

Under the latest agreement, Loudeye will provide America Online with music samples, music catalog encoding and metadata services. The multi-year agreement calls for Loudeye to support digital music content across certain AOL properties including AOL Music's Spinner.com, the Internet radio service.

In addition to music samples, Loudeye will provide comprehensive digital media services including the encoding of Spinner's music library. Additionally, Loudeye will provide the digital content metadata, enabling AOL to offer a more robust music experience for its listeners.

"Loudeye's solutions will help provide us with greater flexibility and enhance the audio quality of our programming across our range of music services," said Kevin Conroy, Head of AOL Music at America Online Inc.