MTV buys into Diamond's RioPort MP3 player

MTV Networks Online, a division of Viacom has signed a deal with Diamond Multimedia Systems subsidiary RioPort to deliver digital music over the Internet.

The deal calls for the two companies to distribute and sell digital music across MTV's properties, which include MTV.com, VH1.com, Nick.com, SonicNet and the upcoming Buggles Project site. The companies expect to have downloads ready this fall.

In return for promoting the downloads and delivering content, MTV will share in revenues from music sales and get a stake in RioPort. The companies did not release specific financial details.

Diamond has been one of the leading companies in the relatively new downloadable music space. The company's portable Rio player, which allowed users to download music in the MP3 format and save it for later playback, was the subject of much controversy, and a lawsuit from the record industry.

But recently, the industry has reached a form of détente, agreeing to a new standard, the Secure Digital Music Initiative, which allows music to be protected.

RioPort will created branded online audio players for each of MTV's sites, all of which will support RioPort technology platforms. MTV will also have access to RioPort's catalog of SDMI-compliant licensed music.

"Our audience demands and expects that we help them download music. RioPort provides us with the opportunity to be able to do so in a secure and easy way that is SDMI compliant," MTV Networks Online president Fred Seibert said in a release. "With this agreement, RioPort is our private label download solution, aggregating content, providing music management software, and licensing and marketing the production of consumer hardware devices."

MTV isn't the only company getting into the downloadable music business. Universal Music Group, a unit of Seagram announced deals with RioPort and others yesterday to make content available for digital music players.

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