(Reuters) (01/26/04)

Edited By Michael Bennett

NEW YORK, NY - UNIVERSAL MUSIC GROUP, the world's largest record label, is teaming up with satellite broadcaster DirecTV and business partners behind a prominent pornography video company to launch a music channel featuring uncensored videos.

According to a report in the Los Angeles Times, Universal, a unit of Vivendi Universal, is in negotiations with DirecTV to offer the new subscription-based channel, known as "1 AM."

Universal and the entrepreneurs of Vivid Entertainment Group founders, which is known for porn videos such as "Bad Wives" and "Women In Uniform," are expected to split ownership of the venture, the newspaper said, citing sources familiar with the matter.

Other partners in the channel will be the Endeavor talent agency and Shady Records, the Universal-backed label managed by rap superstar Eminem.

General Electric Co. unit NBC is also in the process of combining its television broadcast and cable networks with Universal's parks, film and TV studios.

Representatives of Universal, Vivid, DirecTV, News Corp., and Endeavor were not immediately available for comment.

The newspaper said ownership stakes of the channel are not set in stone, but Universal and Vivid entrepreneurs are likely to each own 45 percent stakes, while Endeavor and Shady Records will have 5 percent apiece.

The main players behind the channel are Jimmy Iovine, chairman of Universal's Interscope label and Ari Emanuel, a founding partner of Endeavor, according to the report.

The channel is the latest in a string of efforts to challenge MTV's dominance of music video and pop culture programming.

Cablevision Systems Corp.-owned Rainbow Media Holdings launched Fuse earlier this year as an edgier upstart.

Another venture, Hype TV, backed by Sean "P. Diddy" Combs, recently landed distribution through the television unit of Playboy Enterprises Inc.

DirecTV, the largest satellite broadcaster in the US with 12 million subscribers, is under the control now of Rupert Murdoch's News Corp. in a deal that cleared regulatory approval in December.

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