Universal Music buys stake in Loud.com

By | August 8, 2007 at 10:06 PM

Universal Music Group said Wednesday it has acquired a stake in the operator of urban social networking Web site Loud.com. The deal is part of the music company’s strategy to gain new sources of revenue and media outlets for its stable of recording artists.

The company, a unit of Paris-based Vivendi SA, did not disclose the size of its equity investment in the Web site, which also operates under the domain name Battlerap.com.

The ad-supported site caters to hip-hop fans who can upload their own raps and compete for a record deal with SRC Records, a label distributed by Universal.

The Web site also sells audio files of hip-hop beats for 99 cents.

So far this year, Universal has made an equity investment in Alliance Trace Media, which owns Paris-based TRACE-TV, and acquired companies that have record labels and operate merchandising, touring and artist management businesses in Spain, Great Britain and Brazil.

Record companies have historically relied on developing new artists and making money from the sale of music or from music publishing.

However, investments in other types of businesses are becoming more common as the industry struggles through a protracted CD sales slump.

Record labels are also looking to strike deals with recording artists that give the labels a slice of touring, merchandising and other revenue.

Earlier this week, Warner Music Group Corp. said it planned to step up such deals.

The New York-based recording company has also invested in artist management businesses, including Front Line Management.

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