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Zomba Looks For Canadian Disribution Partner-Sources

Zomba Music Group, home to pop stars Britney Spears, ‘N Sync and the Backstreet Boys, is talking with several big recording companies regarding a Canadian distribution deal for its music, sources familiar withthe company said.

According to sources, Bertelsmann AG’s BMG Music was told in late March that New York-based Zomba would not renew its Canadian distribution deal, giving it six months to find a new partner.

The distribution deal has provided a big boost to BMG’s market share in Canada for several years. Since Jan. 1, Zomba has also had the option to renew or sever its U.S. distribution deal at any time with BMG.

Termination of that deal could prove to be devastating for Bertelsmann as the company prepares for a possible stock market flotation. Bertelsmann earlier this week said it plans to cut costs and sell non-core or loss-making opertions before the possible stock exchange listing.

New York-based Zomba and BMG declined comment, although sources said Zomba had been talking with EMI Group regarding a new Canadian distribution deal for its music. EMI Group, the British music company that is home to the Beatles, already distributes Zomba’s music in many regions outside the United States.

A spokesman for EMI delined comment.