Former Foes Now in Musical Harmony : Records: Time Warner, Sony, went toe-to-toe in court four years ago. Now they’re partners in a mail-order business.

Maybe time really does heal all wounds, at least when it comes to business feuds.

It was only four years ago, after all, that Sony Corp. and Time Warner Inc. were locked in a legal death-battle over the services of Peter Guber and Jon Peters.

Time Warner ultimately socked Sony for hundreds of millions of dollars for hiring Guber and Peters to head its entertainment unit while they were under contract to Warner Bros., but who’s counting?

Today they’re making music together with a burgeoning direct mail-order business called Time Warner & Sony Sound Exchange, aimed largely at people too crotchety to visit record stores.

The Sound Exchange is an equal partnership of the entertainment conglomerates that began late last year, when Time Warner decided to expand its existing mail-order business. Ruth Shields, its president, said Sony was asked to come aboard because of its extensive artist roster, which includes catalogue cover girl Barbra Streisand, Michael Jackson and Mariah Carey.

The two companies also had an existing relationship as the co-owners of the lucrative Columbia House record club, which Time Warner had captured as part of the 1989 lawsuit settlement.

“The Columbia House relationship had worked out really well,” said Shields, speaking on behalf of both companies. She described the corporate ties between them as “cozy” in a restrained sort of way.

*

That being the case, it’s likely to get even cozier if the experts are right about buying trends in music.

Studies show that record stores are gradually losing ground to mail-order businesses and record clubs as the baby boomers age. Stores held 62.1% of the $9-billion domestic market as of last year, according to a Recording Industry Assn. of America study, but that’s compared to 70.4% in 1988.

Record stores could face another competitor in the future, if home shopping channels expand into the record business, as expected.

With an eye on those developments, many companies are moving aggressively into mail-order and other alternative markets. MCA Music Group, for one, plans a splashy entry into the business later this year.

Ticketmaster is already selling recorded music by mail in connection with phone orders. People buying tickets to “The Will Rogers Follies,” for instance, are offered the option of also purchasing the soundtrack.

Ticketmaster, which handles 35 million calls a year nationwide, won’t break out the financial figures on its record retailing operation, but Chairman Fred Rosen says it’s already a multimillion-dollar business after one year.

“Our demographic group is people 25 to 50, using credit cards, who don’t walk into record stores and are prepared to wait a week to 10 days to get the product,” Rosen said.

“The bywords of the ‘90s are service, convenience and value.”

And profit squeezing. One allure of the direct marketing game is that there’s often no middle man.

The Sound Exchange is mailed to more than 1 million people whose names are culled from upscale magazine subscription lists.

*

For many of those people, convenience seems to outweigh value. A John Lennon greatest hits collection on compact disc, which might sell for $12 to $14 in discount stores, goes for $16.98, not counting shipping and tax, in the latest Sound Exchange catalogue.

Time Warner & Sony plan to turn Sound Exchange into a monthly soon, after publishing sporadically since September.

The company won’t provide revenue figures but says that sales volume is expected to grow by 100% for the full calendar year, compared to last year’s four-month period.

The glossy, 100-page catalogue includes everything from popular and classical music to electronic equipment, autographed baseballs and Elvis Presley stamps.

*

Shields says sales tend to be most brisk on the two coasts, despite the easy availability of record stores. Classic rock is a staple of the business, since the target audience is 35 and older, with an annual income in the $50,000 range, but Sound Exchange also does banner business in the recordings of Jackie Gleason.

And as for the once-bitter feud between the partners? “That was really an aberration,” says Shields.

*

Orion Gets Busy: Orion Pictures, which is struggling to rebuild following 11 months in Chapter 11, has acquired domestic distribution rights to a Dan Curtis film called “Me and the Kid,” which it will release in October.

The distribution costs are being paid by Orion’s majority shareholder, Metromedia, since Orion is prohibited from spending money on new production under its reorganization plan.

“Me and the Kid” stars Danny Aiello and Alex Zuckerman. Curtis produced and financed the movie. Jeff Berg, chairman of International Creative Management, made the distribution deal with Orion. Chairman Leonard White said the acquisition will help put Orion back on its feet as a full-fledged film company.

MUSIC BY MAIL Music buyers are increasingly making their purchases through mail order businesses and record clubs. Some marketers feel that aging baby boomers prefer those services to record stores.

* Where people buy their music: 1988

Record Store: 70.4% Tape or record club: 18.5% Mail order: 6.8% Other: 3.5% * Where people buy their music: 1988

Record store: 62.1% Tape or record club: 22.8% Mail order: 10.6% Other: 4.0% Source: Recording Industry Assn. of America Note: Numbers may not add up to 100% because of rounding.