JOHN DEFTERIOS, CNN ANCHOR: Time Warner and EMI are teaming up to create a music company that accounts for almost one out of every four CDs on the market. Allan Dodds Frank has the story on this 50-50 joint venture.</s>ALLAN DODDS FRANK, CNN CORRESPONDENT (voice-over): The record labels of Cher, Madonna and Eric Clapton are joining forces with the company that controls recordings of The Beatles and The Rolling Stones. By combining music assets of Time Warner, the parent of a CNN, with EMI Music, the companies hope to end recent declines in market share, while saving more than $400 million by sharing operations. Lately, Time Warner Music has been struggling, dropping to number four, while EMI is fifth. Together, they will be a juggernaut, with more than $8 billion in sales. The combination will challenge Seagrams Universal MCA Music for the number-one spot. Sony and Bertelsmann round out the top five. The potential deal comes just two weeks after AOL and Time Warner announced their agreement to merge. That merger is expected to enhance Time Warner's ability to deliver digital music over the Internet, something the EMI deal would only enhance. In an interview before the deal was known, a leading European music writer explained EMI's appeal.</s>AJAZ SCOTT, EDITOR, "MUSIC WEEK": Content is still very much king, therefore content owners and EMI has, you know, a huge archive of recordings, but also, most importantly, has a vast number of music- publishing copyrights, that is rights to the actual songs themselves. EMI, you know, is a huge content owner, so it's a hugely attractive property.</s>DODDS FRANK: Time Warner will play EMI more than $1.6 billion to create the new company, to be called Warner EMI Music. But there will not be any exchange of stock between the two companies, so the recording and music-publishing deal falls short of a full merger. (on camera): Allan Dodds Frank, CNN Financial News, New York.
Time Warner-EMI Teaming Up in 50-50 Joint Venture