Digital music firms pay heavy price for labels’ support

A stark truth facing any aspiring digital music service these days is that working with record labels is going to carry a hefty price.The last 18 months have seen the major music labels accept new technological and business models — such as dropping digital rights management and allowing ad-supported free music — that have given rise to a new generation of digital music services. But the flip side of this willingness to experiment is a demand for higher upfront advances for licensing music and in some cases a substantial equity stake in the company.

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