Warner Music to Launch an Internet-Only Label

Warner Music Group Corp. is preparing to launch a record label that would develop and market new artists and distribute their music only over the Internet.

The venture, tentatively referred to as an “e-label,” is scheduled to be in operation by the end of this year.

Warner, home to artists such as Madonna and Linkin Park, is hoping the label will enable the New York-based company to give emerging artists more time to develop without the traditional pressures of having to churn out a slate of hits.

“At this new label, an artist can develop in a supportive, lower-risk environment,” Warner Chief Executive Edgar Bronfman Jr. said at an Aspen, Colo., gathering of the Progress and Freedom Foundation, a Washington think tank. “An artist is not required to have enough material for an album, only just enough to excite our ears.”

The e-label also would spare Warner the expense of distributing music in physical formats such as CDs.

Instead of releasing a full album every couple of years, the e-label would release “clusters” of three or more songs by an artist online every few months, Bronfman said.

Artists also would retain the ownership of their master recordings and copyrights to the songs, he said.

Bronfman brought in Jac Holzman, who founded Elektra Records, to oversee the development of the e-label.

Earlier this month, Warner said revenue from digital-music sales hit $44 million in its third quarter, up 26% from the second quarter and 76% from the first quarter.

Universal Music Group launched an all-digital record label in November. To date, UME Digital has about a dozen artists and has been selling their music over online retailers such as iTunes and Rhapsody.