CASTING ITS 'NET

UNIVERSAL MUSIC SERVICE TO CASH IN ON WEB

FAIR PLAY: Doug Morris, CEO Universal Music. Industry leader University Music is set to roll out an online music broadcast service for consumers just as it launched a legal battle against two Web sites where users swap videos and songs for free.

In a bid to block renegade Web sites from giving away its songs and videos, Universal Music Group is set to launch an Internet service to make sure it can cash in on its own material.

The new service, which launches in the U.K. today, will become available to U.S. consumers in December and will eventually give users legal access to the thousands of artists under Universal's umbrella.

The move is a frontal assault on outfits such as YouTube, the video site recently purchased by Google for $1.65 billion.

The Universal service "creates a direct-to-consumer broadcast network which is completely under Universal Music's control," said Rob Wells, Senior Vice President, Digital, for Universal Music Group International.

Robert Kelly, the CEO of WWEBNET, the New York-based company which built the service, said his company has struck deals with 70 content owners and was in talks with all the major record labels and movie studios.

"Entertainment industry executives have realized that they need to have their own networks, or else the software companies will just buy them and there won't be an entertainment business anymore," said Kelly.

WWEBNET, a five-year-old Big Apple startup, has received $6 million in seed funding from Palladin Opportunity Fund and other "angel investors," Kelly said.

Kelly said that his firm had retained EKN Securities and filed a letter of intent - a first step toward an initial public offering of the company.

Universal's new service, which will be controlled by Universal and operated on a subscription model, provides users access to song and music video streams and downloads, backstage interviews, concert footage, and vault materials from Universal's vast content library.