Victor Entertainment Inc, a JVC subsidiary with rights to the works of various artists, will take a stake in Sony affiliate Label Gate Co, distributing music online through Label Gate's Web site.
Label Gate will provide copyright protection technology and a payment system to music companies.
JVC already plans to operate a music site with parent Matsushita Electric Industrial Co, but believes the tie-up with Sony will be beneficial because of weak demand for online music, the Nihon Keizai newspaper reported, citing unnamed company sources.
Sony and Matsushita have developed different protocols for the memory media used to store downloaded music.
JVC, which has lost money for the past three years, said Friday it will cut its local workforce by 16 percent within three years, hoping to turn a profit this fiscal year ending March 30.
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