• USA Today , Thursday, September 7, 2006 11:16 AM

A significant piece of news in the recording industry yesterday could have implications for SpiralFrog, the closely watched Web startup that plans to offer music free music on its ad-supported Web site. Vivendi Universal, which owns SpiralFrog partner Universal Music Group, put itself in position to become the world's No. 1 music publishing company, after its bid of 1.6 billion Euros ($2.04 billion) for Bertelsmann's BMG Music Publishing Group. If approved by antitrust officials in the U.S. and Europe, UMG would pick up more than 1 million copyrights from the likes of Coldplay, Christina Aguilera, R. Kelly, the BeeGees and Barry Manilow. UMG already has roughly 1 million copyrights itself, from Madonna to Prince, Elton John and Bernie Taupin and Paul Simon. If UMG successfully takes over BMG, ad-supported SpiralFrog will have effectively acquired the catalogues of three of the four major record labels: UMG, EMI and BMG. Warner Music Group--the other major label--and a consortium that includes Viacom and private-equity firm Apollo have also bid in Bertelsmann's BMG auction.

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