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                                                                    Exhibit 10.3


March 12, 2004


Mr. Larry Madden


Dear Larry:

On behalf of Loudeye Corp., a Delaware corporation (the "Company"), I am
pleased to offer you the position of Executive Vice President and Chief
Financial Officer. Speaking for myself, as well as the other members of the
Company's management team, we are very much looking forward to having you on
the Loudeye team in that capacity.

The terms of your new position with the Company are outlined below:

     1.   Position.

          a.   You will be the Executive Vice President and Chief Financial
               Officer of the company responsible for all financial, accounting,
               administration and legal affairs, working out of the Company's
               headquarters in Seattle, Washington. You will report to the CEO.

          b.   You agree to the best of your ability and experience that you
               will at all times loyally and conscientiously perform all of the
               duties and obligations required to the reasonable satisfaction of
               the Company. During the term of your employment, you further
               agree that you will devote all of your business time and
               attention to the business of the Company, and the Company will be
               entitled to all of the benefits and profits arising from or
               incident to all such work services and advice. You will not
               render commercial or professional services of any nature to any
               person or organization, whether or not for compensation, without
               the prior written consent of the Company's Board of Directors,
               and you will not directly or indirectly engage or participate in
               any business that is competitive in any manner with the business
               of the Company. Nothing in this letter is designed to prevent you
               from accepting speaking or presentation engagements consistent
               with Loudeye's business plan in exchange for honoraria or from
               serving on boards of charitable organizations, or from owning no
               more than one percent (1%) of the outstanding equity securities
               of a corporation whose stock is listed on a national stock
               exchange. Please seek my approval before accepting a speaking or
               presentation engagement.

     2.   Start Date. Subject to fulfillment of any conditions imposed by the
          accompanying Employment Agreement, you will commence this new position
          with the Company on March 15, 2004.
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Larry Larry Madden
March 24, 2004
Page 2 of 4


     3.   Proof of Right to Work. For purposes of federal immigration law, you
          are required to provide to the Company documentary evidence of your
          identity and eligibility for employment in the United States.

     4.   Compensation.

          a. Base Salary. You will be paid a monthly salary of $19,583.33 which
             is equivalent to $235,000.00 on an annualized basis. Your salary
             will be payable in two equal payments per months pursuant to the
             Company's regular payroll policy (or in the same manner as other
             employees of the Company).

          b. MBO. We are pleased to offer you a special MBO Bonus target of
             $40,000. This special MBO bonus will be paid to you in a lump sum
             in the second quarter when you achieve your target objectives set
             forth here. These targets will be as follows: (i) assessment of our
             accounting, finance and legal organizations and actions to correct
             the expense and use of outside legal services that are not
             securities or M&A related. (ii) establishing the structure and
             focus for each organization and providing target objectives for
             each, (iii) securing digital download agreements with the five
             major labels. In the unlikely event that you leave the Company of
             your own volition within 12 months of your start date, you will be
             responsible for reimbursement to the Company of this special MBO
             bonus. You hereby authorize the Company to withhold this amount
             from any monies owed to you upon the severance of your employment.

          c. Signing Bonus. You will receive a signing bonus of seventeen
             thousand dollars ($17,000) to be paid on the last pay period of the
             first month of your employment.

          d. Moving Expenses. The company will reimburse you for direct expenses
             related to your relocation to Seattle. These expenses will be costs
             of moving household items, temporary housing, auto rental, meals
             and other transportation incurred during the interim housing
             period.

          e. Personal Objectives Bonus. You will be eligible to receive a bonus
             of twenty five percent (25%) of your base salary (the "Target
             Personal Objectives Bonus Amount"). The Target Personal Objectives
             Bonus Amount shall be subdivided into two or three separate
             performance specific targeting bonus amounts which shall be jointly
             determined by the CEO and you within the next 30 days.

          f. Company Objectives Bonus. You will be eligible to receive a bonus
             of seventy five percent (75%) of your base salary (the "Target

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Larry Larry Madden
March 24, 2004
Page 3 of 4

          Company Objectives Bonus Agreement"). The Target Company Objectives
          Bonus Amount shall be subdivided into two separate performance
          specific targeting bonus amounts which shall be awarded based upon the
          following:

          (i)  Revenue growth and Profitability; The company must achieve its
               revenue growth and profitability targets in order for management
               to be eligible for the Company Objectives Bonus. The metrics on
               revenue growth and profitability are currently before the
               compensation committee and will be finalized by March 15, 2004.

          (ii) Annual Review. Your base salary will be reviewed annually as
               part of the Company's normal salary review process.

     g.   Stock Options. During the employment period, you will be eligible to
          participate in the stock option or other incentive programs available
          to officers or employees of the Company and shall have the opportunity
          to purchase shares in accordance with its rules at a level
          commensurate with your position, all such grants being subject to the
          approval of the Board of Directors of Loudeye. Subject to board
          approval, you will receive an award effective on the date established
          by the Board of Directors, of 750,000 options to purchase, to the
          extent available, shares of Loudeye with an exercise price based on
          the closing price of Loudeye stock upon the date of board approval of
          the grant of the options.

     h.   Vesting Period. This grant shall vest over forty eight (48) months,
          shall have a ten year term and shall be exercisable after the first
          nine months of vesting. Vesting will accelerate upon the first to
          occur of (i) a Change of Control, or (ii) the adoption by the Board of
          Directors of the Company of a plan of liquidation or dissolution of
          Loudeye.

5.   Proprietary Information and Inventions Agreement. Your acceptance of this
     offer and commencement of employment with the Company is contingent upon
     the execution, and delivery to an officer of the Company, of the Company's
     Proprietary Information and Inventions Agreement, a copy of which is
     enclosed for your review and execution (the "Confidentiality Agreement"),
     prior to or on your Start Date.

6.   Confidentiality of Terms. The Company maintains your personnel file,
     including information about your salary and benefits, in a private and
     confidential manner. Our policy to protect the privacy of such information
     is enhanced when you keep the information confidential.
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Larry Larry Madden
March 24, 2004
Page 4 of 4

          7.   At-Will Employment. Your employment with the Company will be on
               and "at will" basis, meaning that either you or the Company may
               terminate your employment at any time for any reason or no
               reason, without further obligation or liability.

This letter summarizes the general terms and conditions of your potential
employment with the Company and is provided as a courtesy. The accompanying
Proprietary Information and Inventions Agreement set forth the proposed
contractual terms of your employment with the Company and supersede any prior
representations or agreements, whether written or oral. To indicate your
acceptance of the Company's offer, please sign and date this offer and return it
to me, along with a signed and dated copy of the Proprietary Information and
Inventions Agreement, at your earliest convenience.

Larry, I am delighted to be able to extend you this offer and we all look
forward to working with you.



Very truly yours,


LOUDEYE CORP.

/s/ Jeff Cavins
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Jeff Cavins
President & CEO


Enclosures: Proprietary Information and Inventions Agreement