Amazon Seeking Web Music Deals

Online retailer Amazon.com Inc. is in advanced talks with four major music companies on starting a digital music service as soon as this summer to compete with Apple, people familiar with the matter said Thursday.

Amazon is seeking to create a viable rival to Apple Computer Inc.’s iTunes service and its fast-selling iPod player, both of which dominate the digital music market, they said.

Seattle-based Amazon is in talks to license music from Universal Music Group, Sony BMG, Warner Music Group Corp. and EMI Group, according to sources briefed on the discussions. No deals have been reached.

Amazon is considering a subscription music service that would include a discounted portable music player bearing the Amazon brand, the sources said. The player would be subsidized by the subscription service.

“This seems like a very robust service. It will have plenty of support from the music industry,” a source said.

Amazon’s service, which one source said was originally slated for a spring launch, could become a significant competitor and loosen Apple’s stranglehold on the nascent but growing industry.

Although sales and rentals of music online remain a small part of the worldwide music industry, estimated to be worth $30 billion annually, digital music’s double-digit percentage sales growth is viewed as a beacon in a business racked by tepid physical album sales.