Vivendi, Sony Plan a Duet on ‘Virtual Jukebox’

Vivendi Universal and Sony, which control two of the world’s largest music groups, said Thursday they are on track to launch a joint online music service or “virtual jukebox” this summer.

The Internet service will challenge Napster, the popular online song-swapping service, which on Tuesday offered to pay $1 billion over five years to the recording industry to end a bitter lawsuit that threatens its survival.

It also throws down the gauntlet to German media giant Bertelsmann, which joined forces with Napster in October to help resolve the company’s legal problems.

The project originally was announced by Sony and Universal Music, then a unit of Seagram, last May.

“It is an alternative to Napster which will allow us to monitor exactly which titles have been listened to and downloaded,” said Pascal Negre, head of Paris-based Vivendi Universal’s Universal Music France. “It is over a secure network that prevents the item from getting distributed all over the Internet and provides better sound quality.”

Vivendi Chairman Jean-Marie Messier said the new venture, which has the working name Duet, already is operational through a team in San Francisco. Sony said the unit will be based in New York.

In addition to the music of Universal and Sony Music, the new site plans to buy licensing rights from other music companies, Messier said.

“We hope to license 50% of the world’s music,” he said.

The venture is not pursuing an alliance with Napster, Messier said, but is in discussions with other partners.

Sony and Vivendi will have equal ownership of Duet and will offer a subscription service and a pay-per-listen option.