Document:

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                                                                   EXHIBIT 10.36

                                                                        12.10.99

                        INTERNET VIDEO LICENSE AGREEMENT

THIS AGREEMENT is made as of the 20th day of December, 1999 BETWEEN:

1.       WARNER MUSIC GROUP INC. ("Warner") of 75 Rockefeller Plaza, New York,
New York 10019; and

2.       ARTISTdirect, INC. ("ADI") of 17835 Ventura Boulevard, Suite 310,
Encino, California 91316.

BACKGROUND

A.       WHEREAS, Warner, in order to promote the sale and distribution of
         phonorecords and audio-visual music products throughout the "Territory"
         (as hereinafter defined in subparagraph 1.01(o)), licenses the use of
         "Warner Videos" (as hereinafter defined in subparagraph 1.01(q)); and

B.       WHEREAS, ADI intends to "Stream" (as hereinafter defined in
         subparagraph 1.01(l)) Warner Videos from "Licensed Music Sites" (as
         hereinafter defined in subparagraph 1.01(e)).

C.       NOW THEREFORE, the parties hereto have agreed to the terms and
         conditions set forth below with respect to the non-exclusive use by ADI
         of Warner Videos on Licensed Music Sites.

THE PARTIES AGREE AS FOLLOWS:

1.       DEFINITIONS AND INTERPRETATION

1.01     Definitions

         Unless defined elsewhere in this Agreement, capitalized terms shall
         have the meanings ascribed to them below:

(a)      "ENDUSER DEVICE": any device (such as a computer or a Web TV) which is
         capable of receiving and playing/displaying the audio-visual output of
         a Streamed Video.

(b)      "EXCERPT": means a continuous audio-visual portion of a Warner Video
         where no more than 30 seconds thereof may be accessed by the enduser or
         viewed by a viewer.

(c)      Intentionally deleted.

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(d)      "INTERNET": the wide area cooperative network of university, corporate,
         government and private computer networks communicating through
         Transmission Control Protocol/Internet Protocol which is commonly
         referred to as the Internet.

(e)      "LICENSED MUSIC SITE": any Music Site which: (i) (A) is either wholly-
         or partially-owned by ADI; and (B) is wholly-programmed and operated by
         ADI; and (C) is prominently and exclusively branded with the tradename,
         trademark or logo of ADI; or (ii) (A) is operated and managed by ADI
         and (B) is subject to a comprehensive written web site agreement
         between ADI and a recording artist (or such recording artist's
         furnishing company) ("Artist") of the type which ADI typically enters
         into with recording artists as of the date hereof; provided, that such
         Artist is a recording artist then-currently signed to an exclusive
         recording agreement with affiliates of Warner, which such Music Site on
         a gratis basis (A) Streams Videos in a sequence designated by ADI on a
         continuous 24-hour, seven-day-a-week basis (i.e., as part of a
         "Pre-Programmed Stream") or (B) Streams particular Videos at the demand
         of an enduser (i.e., as part of an "On-Demand Stream"). Without
         limiting the foregoing, "Licensed Music Site" shall include all of
         those "pages" on a Music Site: (w) that constitute "home pages"; (x)
         that direct an enduser to a Video; (y) through which an enduser
         navigates in order to view a Video; or (z) from which an enduser can
         Stream a Video.

(f)      "MASTER": a first generation color copy of the fully-edited titled and
         assembled electronic master of a Warner Video (a "Videotape Copy") or,
         at Warner's election, a copy of such electronic master digitized by
         Warner in a format compatible with ADI's technical requirements (a
         "Digitized Copy").

(g)      "MUSIC SITE": a non-subscription, music audio-visual programming
         service which may be advertiser-supported, which: (i) is delivered over
         the Internet (which may also include delivery via broadband
         technology); (ii) is transmitted from fileservers exclusively located
         in the United States using Streaming technologies; (iii) uses English
         as the principal language spoken by hosts or used in textual, graphic
         or interstitial programming; and (iv) if such service transmitted
         digital audio data only, rather than digital audio-visual data (other
         than with respect to On-Demand Streams) would be subject to statutory
         licensing pursuant to Paragraph 2, Subsection d, Section 114 of title
         17, United States Code (the "Digital Millennium Copyright Act").

(h)      "ON-DEMAND STREAM FRACTION": a fraction, the numerator of which is that
         number of transmissions to an individual enduser of Warner Videos (in
         whole or in part) other than Excerpts on a particular Licensed Music
         Site as part of an On-Demand Stream and the denominator of which is
         that number of transmissions to an individual enduser of Videos (in
         whole or in part), including Warner Videos, on such particular Licensed
         Music Site as part of an On-Demand Stream, as determined in a calendar
         quarter.

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(i)      "ON-DEMAND STREAM RECEIPTS": gross advertising monies (or the monetary
         value of any non-monetary advertising consideration) actually received,
         directly or indirectly, by ADI or ADI's affiliates in connection with
         the page of a Licensed Music Site that provides an On-Demand Stream of
         one or more Warner Videos less any actual advertising agency or media
         sales fees directly related thereto.

(j)      "PRE-PROGRAMMED STREAM FRACTION": a fraction, the numerator of which is
         that number of transmissions to an individual enduser of Warner Videos
         (in whole or in part) other than Excerpts on a particular Licensed
         Music Site as part of a Pre-Programmed Stream and the denominator of
         which is that number of transmissions to an individual enduser of
         Videos (in whole or in part), including Warner Videos, on such
         particular Licensed Music Site as part of a Pre-Programmed Stream, as
         determined in a calendar quarter.

(k)      "PRE-PROGRAMMED STREAM RECEIPTS": gross advertising monies (or the
         monetary value of any non-monetary advertising consideration) actually
         received, directly or indirectly, by ADI or ADI's affiliates in
         connection with the page of a Licensed Music Site that provides a
         Pre-Programmed Stream of one or more Warner Videos less any actual
         advertising agency or media sales fees directly related thereto.

(l)      "STREAM(s)(ed)(ing)": a public performance of any duration via the
         Internet that permits an enduser to view data contemporaneously with
         its reception by an Enduser Device in such a manner that the data is
         not copied, duplicated or stored in such Enduser Device except by way
         of temporary buffering.

(m)      "TERM": shall commence on the date of this Agreement and end on
         December 31, 2001, unless sooner terminated as set forth herein.

(n)      "TERM YEAR": each separate, consecutive 12-month period of the Term.

(o)      "TERRITORY": worldwide.

(p)      "VIDEO": an audio-visual work embodying the sound recording of a single
         musical composition in synchronization with visual images intended
         primarily for promotional use.

(q)      "WARNER VIDEO": any Video with respect to which Warner has promotional
         exhibition rights in the Territory (a "Controlled Video") that Warner
         or any of Warner's wholly-owned US-based record company affiliates (the
         "Affiliates") wish to license to unaffiliated third parties for
         broadcast television exhibition or to unaffiliated third party Music
         Sites for Streaming, provided that the soundtrack of such Video is a
         duplicate of a sound recording owned or controlled for the Territory by
         Warner. Within sixty (60) days following the date of this Agreement,
         Warner shall provide ADI with a list of current Affiliates. "Warner
         Videos" shall not include: (i) any Videos commercially exhibited prior
         to the commencement of the Term; or (ii) any Video which is part of a
         long-form audio-visual program and is not distributed or licensed by
         Warner separately therefrom. Warner shall have the right to elect in
         Warner's sole discretion that Controlled Videos from up to [***]*
         albums released in any Term Year not become Warner Videos for the
         purposes of this Agreement until 90 days following the date which is
         the earlier of: (A) the date on which the Video is initially Streamed
         under Warner's authority by an unaffiliated third party; or (B) the
         date on which the Video is initially exhibited under Warner's authority
         on television in the US.

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* Confidential treatment has been requested for the bracketed portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

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1.02     Headings

         The headings used in this Agreement are for ease of reference only and
         shall have no effect on the interpretation or construction of this
         Agreement.

1.03     Plural/Singular/References

         The plural may include the singular and the singular may include the
         plural and this Agreement shall be interpreted in this regard as the
         context may require. References to paragraphs and subparagraphs are to
         paragraphs and subparagraphs of this Agreement, and references to any
         agreement or other instrument shall be deemed to include references to
         that agreement or other instrument as varied or replaced from time to
         time.

2.       GRANT OF RIGHTS

2.01     Duplication Rights

         During the Term, subject to the terms and conditions of this Agreement,
         Warner grants to ADI a non-exclusive license to digitally encode and
         duplicate Warner Videos in their entirety for duplication on ADI's
         fileservers for the sole purpose of producing programming containing
         Warner Videos for Streaming on Licensed Music Sites.

2.02     Streaming Right

         Subject to the terms and conditions of this Agreement and any
         contractual restrictions imposed upon Warner in connection with Warner
         Videos of which Warner has advised ADI in writing with reasonable
         advance notice, during the Term Warner grants to ADI a non-exclusive
         license: (a) to permit endusers to access via Streaming Warner Videos
         in their entirety as part of a Pre-Programmed Stream on a Licensed
         Music Site; and (b) to permit endusers to access via Streaming Warner
         Videos in their entirety as part of an On-Demand Stream on a Licensed
         Music Site; provided, however, that endusers shall not be able to
         Stream more than one Warner Video at a time as part of a continuous
         transmission (i.e., endusers shall not be able to Stream a series of
         Warner Videos as part of one continuous transmission). Continuously
         during the Streaming of any Warner Video as part of an On-Demand Stream
         and in a space that is "above the fold," near or adjacent to, and on
         the same page as such Warner Video, ADI shall, at ADI's sole cost and
         expense, provide a button permitting an enduser "one-click" access to
         the "home page" for the applicable Affiliates' official site of the
         applicable artist (or, if the artist does not have an official site,
         the "home page" for the official site of the applicable Affiliate that
         is the artist's record company), provided that Warner delivers to ADI,
         prior to or no later than Warner's delivery of the applicable Warner
         Video, the foregoing "home

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         page" information. If other links are provided to third-party sites for
         the same artist, then the Affiliate's link shall be the first listed
         and the most prominent.

2.03     Advertising and Promotion

         Subject to the terms and conditions of this Agreement and any
         contractual restrictions imposed upon Warner in connection with Warner
         Videos of which Warner has advised ADI in writing, during the Term, ADI
         may utilize Excerpts in any and all media to advertise, promote and
         publicize the exhibition of Warner Videos on the Licensed Music Sites;
         provided, however, that, without Warner's written consent, no more than
         one Excerpt per artist may be used for such purpose.

2.04     Names and Likenesses

         Subject to the terms and conditions of this Agreement and any
         contractual restrictions imposed upon Warner in connection with Warner
         Videos of which Warner has advised ADI in writing with reasonable
         advance notice, during the Term, ADI may use the name and
         Warner-approved or -supplied likenesses, such approval not to be
         unreasonably withheld or delayed, of such artist for the purposes of
         advertising, promoting or publicizing the Streaming by ADI of such
         Warner Video on the applicable Licensed Music Site, but not in a manner
         which implies an endorsement of any service (including, without
         limitation, Licensed Music Sites) or product without Warner's prior
         consent.

2.05     Reservation of Rights

(a)      As between Warner and ADI, Warner retains all ownership rights in
         Masters and Warner Videos including, without limitation, all copyrights
         and trademarks in Masters and Warner Videos; provided, however, that
         neither Warner nor the Affiliates shall use in any manner any Digitized
         Copy of a Warner Video created by or at the direction of ADI, unless
         Warner or an Affiliate has made payment therefor in accordance with
         paragraph 4.01.

(b)      ADI shall not have any rights in Warner Videos other than as expressly
         provided in this Agreement.

2.06     Withdrawal Rights

         ADI agrees that ADI's rights to Stream any Warner Video may be
         terminated by Warner upon one week's prior written notice to ADI if any
         of the following conditions are met:

(a)      If the respective Affiliate, in the respective Affiliate's good faith
         business judgment believes that such termination is necessary for
         significant artist relations purposes; or

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(b)       If the respective Affiliate's rights in the Warner Video terminate; or

(c)      If the respective Affiliate is notified or otherwise becomes aware of
         an apparently bona fide third-party claim that the transmission of the
         Warner Video infringes rights owned by others.

3.       PROHIBITIONS ON ADI

         ADI shall only have the right to exploit or use Warner Videos as
         specifically authorized in Paragraph 2 of this Agreement, or as
         otherwise agreed to by Warner in writing in its sole discretion, and
         may not exploit or use Warner Videos in any other manner. Without
         limiting the foregoing, unless Warner agrees otherwise in writing,
         during the Term, neither ADI nor any party acting on behalf of ADI
         shall, directly or indirectly:

(a)      copy or duplicate any Warner Video except as ADI may reasonably require
         to exercise ADI's rights under this Agreement;

(b)      Stream (or encode to permit the Streaming of) the audio portion of any
         Warner Video at a transmission rate greater than [***]* or the video
         portion of any Warner Video at a transmission rate greater than [***]*;

(c)      Stream the soundtrack of any Warner Video separately from the visual
         portion thereof;

(d)      Stream the visual portion of any Warner Video separately from the
         soundtrack thereof, except to the extent that ADI uses only the visual
         portion of an Excerpt to exercise ADI's rights under subparagraph 2.03
         above without any soundtrack whatsoever;

(e)      Stream any Warner Video other than in conjunction with the sequence of
         images originally synchronized with the sound recording included
         thereon;

(f)      Stream any Warner Video on a "pay-per-view" or "pay-per-play" basis;

(g)      exhibit any advertisement or commercial of any nature during or
         associated with the Streaming of any Warner Video in a manner which
         reasonably implies an endorsement by the artist whose performances are
         contained on such Warner Video;

(h)      license or authorize a third party (whether or not affiliated with ADI)
         to "deep link" to a non-Licensed Music Site for the purpose of
         Streaming a Warner Video; or

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* Confidential treatment has been requested for the bracketed portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

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(i)      except as expressly set forth in Paragraph 5, edit or otherwise alter
         any Warner Video, including, without limitation, the deletion or
         erasing of any signal now or hereafter contained therein to facilitate
         the automatic identification and/or logging of Warner Videos so
         Streamed and/or to restrict the reproduction of Warner Videos so
         Streamed (a "Protective Signal").

         Should ADI become aware that any party (whether or not acting on behalf
         of ADI) is circumventing the provisions of this Paragraph 3 (a
         "Circumvention Event"), ADI shall promptly notify Warner in writing
         thereof and ADI shall, at ADI's sole cost and expense, use ADI's
         commercially reasonable efforts to prevent such circumvention.

4.       WARNER VIDEOS

4.01     Servicing of Masters

         In respect of each Warner Video, Warner shall make a Master available
         to ADI for collection at ADI's expense, no later than the date Warner
         or an Affiliate makes the applicable Warner Video available for
         delivery to other unaffiliated third parties. Should Warner provide ADI
         with a Master in Videotape Copy form, ADI shall provide Warner, at
         Warner's request, with a Digitized Copy of such Master provided that
         Warner pays ADI's actual duplication and shipping expenses in
         connection therewith.

4.02     Treatment of Warner Videos and Masters

         ADI shall:

(a)      maintain all Masters and all copies of Masters on ADI's premises and
         safeguard the same from any loss, damage, theft, unauthorized use,
         copying, storage or duplication by others;

(b)      be solely responsible for any loss, theft or damage to Masters and
         copies of Masters in their possession and any unauthorized use,
         copying, storage or duplication by others thereof; and

(c)      upon the expiration of the Term or termination of this Agreement, at
         Warner's election, ADI shall either: (i) (A) to the extent that Warner
         made Digitized Copies of any Masters and provided them to ADI
         hereunder, return all such Masters and copies of such Masters to Warner
         at ADI's expense; (B) to the extent that ADI made Digitized Copies of
         any Masters hereunder, but has not provided Digitized Copies of such
         Masters to Warner pursuant to subparagraph 4.01 above, return all such
         Masters and copies of such Masters to Warner and Warner shall pay ADI's
         actual duplication and shipping expenses; and (C) to the extent that
         ADI made Digitized Copies of any Masters hereunder and has provided
         Digitized Copies of such Masters to Warner pursuant to subparagraph
         4.01 above, return all such Masters and copies of such Masters to
         Warner at

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         ADI's expense; or (ii) or destroy all Masters and all copies of Masters
         at ADI's sole cost and expense, and provide Warner with a written
         affidavit verifying such destruction.

5.       ADI'S UNDERTAKINGS

         During the Term, ADI shall have the obligation, at ADI's sole cost and
         expense:

(a)      to exhibit the following information continuously during the Streaming
         of each Warner Video in a space adjacent to the Warner Video, provided
         that Warner submits such information to ADI in a timely manner:

         (i)   the title of the musical composition on the Warner Video;

         (ii)  the title of the record or home video that includes the
               performance of the musical composition contained in the Warner
               Video;

         (iii) the name of the artist performing the musical composition
               contained in the Warner Video;

         (iv)  the name of the record company and the URL of its "home page";
               and

         (v)   the name of the motion picture, if any, from which the Warner
               Video is derived.

(b)      to obtain public performance rights licenses, if necessary, covering
         the performance of the musical compositions in Warner Videos; and

(c)      to transmit as part of each Warner Video Streamed on Licensed Music
         Sites any Protective Signal contained in the Warner Videos; provided,
         however, that the transmission of such Protective Signal does not
         represent a recurrent and unreasonable cost to ADI and in no way leads
         to the deterioration of Streaming quality of Warner Videos.

6.       WARNER'S UNDERTAKINGS

         Warner shall deliver to ADI, at Warner's expense (where available and
         reasonably contemporaneously with the delivery of the relevant Masters)
         artwork, promotional material, biographical material and other
         information in relation to Warner Videos and the relevant artists, to
         be used by ADI solely for promotional purposes on Licensed Music Sites.

7.       COMPENSATION

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7.01     Royalties

         ADI shall pay to Warner royalties equal to:  [***]*.

7.02     Banner Ads

         ADI shall make "Banner Ads" (the "Banner Ads") available to Warner at
         ADI's standard rate card cost therefor, or at such other rate as the
         parties shall mutually agree.

8.       ACCOUNTING AND PAYMENTS; MARKET RESEARCH

8.01     Accounting

         Within 30 days following each calendar quarter of the Term, ADI shall
         account for and pay to Warner any royalties payable in respect of such
         quarter and shall furnish to Warner a statement setting forth:

(a)      a listing of all Warner Videos Streamed on each Licensed Music Site
         during such quarter;

(b)      the number of Warner Videos Streamed on each Licensed Music Site as
         compared to the total number of Videos Streamed on each such Licensed
         Music Site during such quarter;

(c)      Pre-Programmed Stream Receipts and On-Demand Stream Receipts for such
         quarter and the sources thereof;

(d)      the number of times that Warner Videos were Streamed on each Licensed
         Music Site as compared to the total number of times that Videos were
         Streamed on each such Licensed Music Site during such quarter;

(e)      the number of "pageviews" of the Banner Ads during such quarter and the
         number of "clickthroughs" from the Banner Ads to URLs designated by
         Warner during such quarter.

         ADI shall also furnish Warner with the information described in
         subparagraphs 8.01(a), (b) and (d) on a weekly basis within 10 days
         following the end of each week during the Term.

8.02     Audit Rights

(a)      ADI shall keep complete and accurate books and records of account
         relating to the Streaming of Warner Videos and Videos maintained to a
         standard sufficient to enable an audit trail to be established.

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* Confidential treatment has been requested for the bracketed portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

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(b)      Warner shall have the right during the Term and during the two-year
         period following the termination or expiration of the Term, at Warner's
         sole cost and expense, to have a certified public accountant inspect
         ADI's books and records no more than once during any year. This
         inspection shall take place at ADI's office, during normal business
         hours on not less than 30 days' written notice. The auditor appointed
         by Warner may inspect and take copies of the books and records of ADI
         solely for the purpose of verifying the calculation of royalties
         accruing to Warner under this Agreement and verifying ADI's compliance
         with Paragraph 7.

(c)      Each statement rendered under this Agreement shall be deemed final and
         binding upon Warner as an account stated and shall not be subject to
         any claim or objection by Warner unless Warner notifies ADI of Warner's
         objection to the applicable statement, stating the basis thereof in
         reasonable detail within three (3) years after the date such statement
         was rendered to Warner hereunder.

8.03     Market Research

         ADI and Warner shall cooperate with each other in conducting market
         research, at Warner's sole cost and expense, designed to determine the
         effect of the Licensed Music Sites on consumer awareness of artists
         featured in Warner Videos and sales of such artist's records. ADI and
         Warner shall use the results of such research for internal purposes
         only. Such market research shall be subject to the approval of any
         applicable artists (but only if required by written agreement between
         ADI and such artist) and shall be subject to the published privacy
         policy of the applicable Licensed Music Site (if any).

9.       WARRANTIES AND INDEMNITY

9.01     ADI's Warranties

         ADI represents and warrants that:

(a)      ADI has full right and authority to enter into and to fulfill all of
         ADI's obligations under this Agreement; and

(b)      ADI shall comply with all licenses, laws and regulations relating to
         its maintenance and transmission of Licensed Music Sites.

9.02     Warner's Warranties

(a)      Warner represents and warrants that Warner has the right to enter into
         and fulfill all of Warner's obligations under this Agreement; and

(b)      Warner makes no representation or warranty whatsoever with respect to
         the non-dramatic performing rights in the musical compositions embodied
         in the Warner Videos.

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9.03     Indemnity

(a)      ADI does hereby indemnify, save and hold harmless Warner and Warner's
         subsidiaries, affiliates, licensees, assigns, officers and employees
         from any and all loss and damage (including, without limitation,
         reasonable fees and disbursements of counsel incurred by Warner in any
         action or proceeding between ADI and Warner or between Warner and any
         third party or otherwise) arising out of or connected with any claim or
         act or omission by ADI which is inconsistent with any of the
         representations or agreements made by ADI in this Agreement or any
         breach of ADI's obligations hereunder or any unauthorized use by ADI or
         any party acting on behalf of ADI of Masters or Warner Videos in
         connection with the advertising, promotion or publicity of each Warner
         Video or the name or likeness of any artist who rendered services in
         connection with such Warner Videos. Warner shall have the right at all
         times, in Warner's sole discretion and at Warner's sole cost and
         expense, to retain or resume control of the conduct relative to the
         defense of any claim to which the foregoing indemnity applies. The
         foregoing indemnity shall be limited to claims reduced to judgment or
         settled with ADI's prior written consent not to be unreasonably
         withheld.

(b)      Warner does hereby indemnify, save and hold harmless ADI and ADI's
         subsidiaries, affiliates, licensees, assigns, officers and employees
         from any and all loss and damage (including, without limitation,
         reasonable fees and disbursements of counsel incurred by ADI in any
         action or proceeding between ADI and Warner or between ADI and any
         third party or otherwise) arising out of our connected with any claim
         or act or omission by Warner which is inconsistent with any of the
         representations or agreements made by Warner in this Agreement or any
         breach of its obligations hereunder or any claim that any Warner Video
         or the content thereof violates the rights of any third party,
         including, without limitation, libel, slander, defamation, copyright,
         trademark, and rights of privacy and publicity. ADI shall have the
         right at all times, in ADI's sole discretion and at ADI's sole cost and
         expense, to retain or resume control of the conduct relative to the
         defense of any claim to which the foregoing indemnity applies. The
         foregoing indemnity shall be limited to claims reduced to judgment or
         settled with Warner's prior written consent not to be unreasonably
         withheld.

(c)      The indemnitor shall give the indemnitee prompt written notice of any
         claim to which the foregoing indemnity applies, and the indemnitor
         shall have the right to participate in the defense of any such claim
         through counsel of the indemnitor's own choice and at the indemnitor's
         cost and expense.

10.      TERMINATION

10.01    Warner's Termination Rights

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         Warner may terminate this Agreement immediately by written notice to
         ADI if, at any time during the Term:

(a)      ADI goes in liquidation, receivership or administration or becomes
         bankrupt, makes any arrangement for the benefit of ADI's creditors or
         has a receiver appointed for any of ADI's assets; provided, that if
         such proceeding is involuntary, then Warner shall not have the right to
         terminate the Term unless such proceeding is not dismissed within 90
         days of the filing thereof;

(b)      ADI breaches any material term or provision of this Agreement;

(c)      the Licensed Music Sites cease, except for any instance of force
         majeure, to be transmitted for a continuous period of 10 days; or

(d)      if ADI does not succeed in preventing a Circumvention Event within 60
         days following ADI's becoming aware thereof;

         provided, in the case of any event set forth in subparagraph (b) above,
         Warner shall have given ADI written notice of such event and ADI shall
         have failed to cure same within 30 days after ADI's receipt of such
         notice (or 10 business days if the event is ADI's failure to pay Warner
         a sum certain).

10.02    ADI's Termination Rights

         ADI may terminate this Agreement immediately by written notice to
         Warner if: (a) at any time during the Term, Warner goes into
         liquidation, receivership or administration or becomes bankrupt, makes
         any arrangement for the benefit of Warner's creditors or has a receiver
         appointed for any of Warner's assets; provided, that if such proceeding
         is involuntary, then ADI shall not have the right to terminate the Term
         unless such proceeding is not dismissed within 90 days of the filing
         thereof; or (b) if Warner or an Affiliate breaches any material term or
         provision of this Agreement and fails to cure such breach within 30
         days after ADI's written notice to Warner of such breach.

11.      PROCEDURE UPON TERMINATION

         Upon the expiration or termination of this Agreement:

(a)      ADI shall cease the Streaming of Warner Videos on Licensed Music Sites;

(b)      ADI shall perform in accordance with the provisions of subparagraph
         4.02(c); and

(c)      should ADI terminate this Agreement pursuant to subparagraph 10.02
         above, ADI shall have no further obligations to Warner and Warner shall
         have no further obligations to ADI.

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12.      MISCELLANEOUS

12.01    Relationship of the Parties

         In performing its obligations under this Agreement, each of the parties
         hereto shall be deemed an independent contractor, and nothing in this
         Agreement shall in any way constitute either party, or any of such
         party's officer or directors, an agent or employee of the other party
         and this Agreement shall not be deemed to constitute a partnership,
         joint venture or contract of employment between the parties.

12.02    Service of Notices

         Any notice which either party hereto may desire to give or which is
         required under the terms of this Agreement shall be given in writing by
         registered or certified mail, return receipt requested, or by telefax
         or by personal service (in all cases, all charges prepaid) to ADI at
         the address first noted in the preamble to this Agreement, Attn: Chief
         Financial Officer, or to such other address to which ADI notifies
         Warner in writing, with copies to Lenard & Gonzalez, LLP, 1900 Avenue
         of the Stars, 25th Floor, Los Angles, California 90067, Attn: Allen D.
         Lenard, Esq., and to Warner to the address first noted in the preamble
         to this Agreement, Attn: General Counsel. In the event any such notice
         is given by mail, such notice shall be deemed to be given on the date
         five business days following the date of such mailing. In the event any
         such notice is given by personal delivery, such notice shall be deemed
         to be given on the date personal delivery is made.

12.03    Confidentiality/Press Announcements

         Neither ADI nor Warner nor their respective affiliates may disclose to
         any third party (other than each party's employees and professional
         advisors, in their capacity as such) any information regarding the
         terms and conditions of this Agreement without the prior written
         consent of the other party except:

(a)      to the extent necessary to comply with the law or the legal process of
         a court of competent jurisdiction or in administrative proceedings, in
         which event the party making such disclosure must use its commercially
         reasonable efforts to procure confidential treatment of such
         information;

(b)      as part of its normal reporting or review procedure to its parent
         companies, its auditors and its attorneys, provided that ADI and Warner
         inform these parties of the provisions of this subparagraph 12.03;

(c)      to the extent necessary to comply with Warner's contractual obligations
         to third parties;

(d)      to make press announcements approved in writing by both of the parties;
         and

                                       13
<PAGE>   14

(e)      to the extent such terms become public through no breach by either
         party of this subparagraph 12.03.

         In addition to the foregoing, ADI shall not disclose to any third party
         (other than to ADI's employees, in their capacity as such): (i) the
         identity of the Warner Videos Streamed on a Licensed Music Site; (ii)
         the number of Warner Videos Streamed on a Licensed Music Site; or (iii)
         the number of times that any Warner Video was Streamed on a Licensed
         Music Site.

12.04    Assignment/Sublicense

         Warner may not assign, sublicense or effectively assign or sublicense
         Warner's rights or obligations under this Agreement except to an
         affiliated or associated company or to a person or entity acquiring all
         or substantially all of the stock or assets of Warner and subject to
         the assignee assuming Warner's obligations hereunder. ADI may not
         assign, sublicense or effectively assign or sublicense any of ADI's
         rights or obligations under this Agreement to any party. For the
         avoidance of doubt, ADI may not syndicate ADI's programming containing
         Warner Videos.

12.05    No Waiver

         No failure to exercise or delay in exercising any right, power or
         privilege under this Agreement by either party shall operate as a
         waiver of that right, power or privilege. Similarly, a single or
         partial exercise of any right, power or privilege by either party shall
         not preclude any other or further exercise of that right, power or
         privilege.

12.06    Remedies Cumulative/Severability

         The rights and remedies contained in this Agreement are cumulative and
         are not exclusive of any rights and remedies provided by law, in equity
         or otherwise. If any provision of this Agreement is prohibited by or
         contravenes any applicable law, or is held by any court of competent
         jurisdiction or any other legally constituted body having jurisdiction
         to make this determination to be void, unlawful or unenforceable then
         that provision shall be severed from the Agreement and rendered
         ineffective, as far as possible, without modifying the remaining
         provisions of this Agreement.

12.07    Entire Agreement/Amendments/Counterparts

         This Agreement contains the entire agreement between the parties with
         respect to its subject matter and supersedes any prior agreement or
         negotiation between the parties on the subject matter of this
         Agreement. There are no representations, agreements or understandings,
         oral or written, between the parties relating to the subject matter of
         this Agreement which are not fully

                                       14
<PAGE>   15

         expressed in this Agreement. No amendment, termination, waiver,
         discharge or modification of this Agreement shall be effective unless
         it is in writing and is signed by an authorized signatory of both
         Warner and ADI. This Agreement may be executed in one or more
         counterparts and by facsimile signature, each of which shall be deemed
         an original and all of which together shall be deemed one Agreement.

12.08    Litigation

         ADI shall notify Warner if ADI becomes aware of any unauthorized
         dealing by any third party in any Warner Videos or in Licensed Music
         Sites, and shall cooperate fully, at Warner's cost, in any dispute
         relating to Warner's rights in Masters and Warner Videos as well as
         Warner's rights under this Agreement. Warner, after written notice to
         ADI, may, at Warner's sole cost and expense, act in the name of ADI and
         Warner to protect Warner's rights under this Agreement and ADI appoints
         Warner ADI's attorney-in-fact to do this; provided, however, that
         Warner shall not be permitted to execute any document on behalf of ADI
         without first affording ADI a reasonable opportunity to execute such
         document itself. If Warner acts on ADI's behalf as permitted herein,
         Warner shall keep ADI informed on a current basis of such acts and all
         proceedings relating thereto.

12.09    Governing Law

         This agreement has been entered into in the state of New York, and the
         validity, interpretation and the laws of the state of New York shall
         govern the legal effect of this Agreement. The New York courts (state
         and federal), only, shall have jurisdiction of any controversies
         regarding this Agreement; any action or other proceeding which involves
         such a controversy shall be brought in these courts, in New York
         County, and not elsewhere. Any process in any such action or proceeding
         may, among other methods, be served upon ADI or Warner, as applicable,
         by delivering it or mailing it, by registered or certified mail, return
         receipt requested, directed to the address first above written. Any
         such delivery or mail service shall be deemed to have the same force
         and effect as personal service within the state of New York.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.

ACCEPTED AND AGREED:

WARNER MUSIC GROUP INC.                     ARTISTdirect, INC.

By: /s/ PAUL VIDICH                         By:  /s/ MARC P. GEIGER
   ------------------------------               ---------------------------
Name: Paul Vidich                           Name: Marc P. Geiger
Title: Executive Vice President             Title: CEO

                                       15<PAGE>   1
                                                                   EXHIBIT 10.37

                                                                         12.2.99

                    WEBCASTING TRANSMISSION LICENSE AGREEMENT

         This Webcasting Transmission License Agreement ("Agreement"), dated as
of December 20, 1999, is made by and between Warner Music Group Inc. with its
principal offices at 75 Rockefeller Plaza, New York, NY 10019, ("Licensor"), and
ARTISTdirect, Inc., with its principal offices at 17835 Ventura Boulevard, Suite
310, Encino, California 91316 ("Licensee").

         WHEREAS, Licensee operates the Web Site that digitally transmits sound
recordings to the public;

         WHEREAS, Licensee wishes to obtain a license for certain transmissions
of sound recordings on the Web Site;

         WHEREAS, Licensee has agreed to pay a royalty and provide certain
additional consideration for such license, and Licensor and Licensee have agreed
upon such consideration and other terms, which are reflected in this Agreement;

         NOW, THEREFORE, and in consideration of the mutual promises contained
in this Agreement and for other good and valuable consideration, including the
consideration provided by Licensee in Section 3, the adequacy and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:

1.     DEFINITIONS

1.1    "Confidential Information" means information submitted to Licensor
       pursuant to Section 5.1, 5.2, 5.3 or 5.4.

1.2    "Excerpt" means a "Sample" (as defined in the Audio Sample License
       Agreement between Licensor and Licensee of even date herewith) where no
       more than 30 seconds thereof may be accessed by the Web Site User.

1.3    "First Transmission Date" means the date on which the Licensee makes the
       first Payable Transmission of a sound recording in the Repertory.

1.4    "License Fee Report" means a report required by Section 5.

1.5    "Payable Transmission" means each instance in which any portion of a
       sound recording of a musical work in the Repertory other than an Excerpt
       is delivered to a Web Site User via Web Site Transmissions (e.g., the
       delivery of any portion of a single track from a compact disc to one
       listener).

                                       1

<PAGE>   2

1.6    "Payable Transmission Rate" means the following:  [***]*.

1.7    "Repertory" consists of all copyrighted sound recordings, including sound
       recordings created during the term of this Agreement, in which Licensor
       has or will have during the term of this Agreement the right to license
       transmissions. Within sixty (60) days following the date of this
       Agreement, Licensor shall provide Licensee with a list of those entities
       that own or control sound recordings which Licensor shall have the right
       to license to Licensee for transmissions as provided hereunder. Such list
       of entities shall be as updated by Licensor from time to time by written
       notice from Licensor to Licensee.

1.8    "Sound recordings" means such term as it is defined in Section 17 U.S.C.
       Section 101.

1.9    "Territory" means the United States, its territories, commonwealths and
       possessions.

1.10   "Web Site" means any Internet site or Internet sites which are: (a) (i)
       majority-owned or wholly-owned or controlled by Licensee; and (ii)
       wholly-programmed and operated by Licensee; or (b) (i) operated and
       managed by Licensee and (ii) subject to comprehensive written web site
       agreements between Licensee and recording artists (or such recording
       artist's furnishing companies) ("Artists") of the type which Licensee
       typically enters into with recording artists as of the date hereof;
       provided, that such Artists are recording artists then-currently signed
       to exclusive recording agreements with affiliates of Licensor.

1.11   "Web Site Transmissions" means all digital audio transmissions to Web
       Site Users from or through the Web Site of stations on the Web Site
       created by Web Site Users in accordance with the parameters set out in
       Exhibit A ("Web Site User Stations"), and does not include digital audio
       transmissions made by any other means.

1.12   "Web Site Users" means all those who access the Web Site solely for
       personal consumer use.

2.     GRANT OF LICENSE

       2.1    Licensor hereby grants to Licensee, during the term of this
       Agreement, subject to the limitations set forth below, a limited
       nonexclusive license to (a) transmit publicly any or all of the sound
       recordings in the Repertory, within the Territory, by means of Web Site
       Transmissions and (b) exhibit within the Territory album cover art in
       postage stamp size adjacent to artist, album title and sound recording
       title information with respect to a sound recording being transmitted
       pursuant to this Agreement on the Web Site; provided, in each case, that
       (i) Licensee complies with Section 17 U.S.C. 114(d)(2)(c)(i) and Section
       17 U.S.C. Section 1101 and all of the terms and conditions of this
       Agreement and (ii) the Web Site Transmissions comply with all
       non-financial terms negotiated or determined by the Copyright Arbitration
       Royalty Panel pursuant to Section 17 U.S.C. Section 114(f). In the event
       that compensation system set by the Librarian of Congress pursuant to
       Section 17 U.S.C. Section 114(f) would result in double payment to
       Licensor with respect to any Web Site Transmissions, then the parties
       shall negotiate in good faith an adjustment that will result in the
       Licensor only receiving the compensation provided for under this
       Agreement with respect to such Web Site Transmissions.

--------
* Confidential treatment has been requested for the bracketed portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                       2
<PAGE>   3

2.2    Nothing in this Agreement authorizes Licensee to grant to any other
       person or entity (including without limitation any Web Site User or any
       operator of another Web site), any right to reproduce by any means,
       method or process whatsoever, now known or hereafter developed, any of
       the sound recordings in the Repertory, including, but not limited to,
       transferring or downloading any such sound recordings to a computer hard
       drive, or otherwise copying the sound recording onto any other storage
       medium.

2.3    Nothing in this Agreement authorizes Licensee to grant to any person or
       entity (including without limitation any Web Site User or any operator of
       another Web site) any right to transmit publicly, by means of digital
       transmission or otherwise, any of the sound recordings in the Repertory.

2.4    The licenses granted in this Agreement extend only to Licensee and the
       Web Site. This Agreement grants no rights to Licensee other than those
       expressly granted herein. Without limiting the generality of the
       foregoing, this Agreement does not grant to Licensee (a) any copyright
       interest in any sound recording; (b) any rights outside the Territory;
       (c) any trademark rights; or (d) any rights to any endorsement by
       Licensor or any other person.

2.5    Licensor represents and warrants to Licensee that it has the rights
       necessary to grant the licenses and other rights granted under this
       Agreement and will defend, indemnify and hold harmless Licensee its
       parent, subsidiaries or affiliates and their directors, officers,
       employees and agents from and against any and all claims, actions,
       liabilities, losses, damages, costs or expenses (whether direct or
       indirect, by contract, in tort, by operation of law or otherwise)
       incurred by or asserted or awarded against Licensee arising out of or in
       connection with a breach of any representation, warranty or covenant
       hereunder or any failure of Licensor to have the rights granted to
       Licensee pursuant to this Agreement.

3.     LICENSE FEES AND OTHER CONSIDERATION

3.1    For each calendar quarter of the term of this Agreement, Licensee shall
       pay Licensor, for the license granted in Section 2.1, an amount equal to
       the number of Payable Transmissions during that quarterly period
       multiplied by the Payable Transmission Rate.

3.2    Licensee shall pay a finance charge of one and one-half percent (1-1/2%)
       per month, or the maximum rate permitted by law, whichever is less, from
       the date due, on any required payment that is not made on or before its
       due date, without prejudice to any other rights Licensor may have in
       connection with such delinquency.

3.3    During the term of this Agreement, Licensee shall, within a reasonable
       time after Licensor's written request setting forth the applicable IP
       address, provide direct links, from the location on the Web Site where
       artist, album title, and sound recording title information for each sound
       recording is provided, (which shall be the same location on such Web Site
       where Web Site Users access the transmission of such sound recording), to
       one or more

                                       3
<PAGE>   4

       Web sites that provide for direct sales of substantially all the sound
       recordings transmitted by Licensee on the Web Site, except to the extent
       that such sales are conducted directly by Licensee from the Web Site. In
       addition, at the option of Licensor, Licensee shall, within a reasonable
       time after Licensor's written request setting forth the applicable IP
       address, provide reasonably prominent "above the fold" direct links from
       the location on the Web Site where information regarding a particular
       recording artist is provided, (which shall be the same location on such
       Web Site where Web Site Users access the transmission of sound
       recordings), to a Web site operated by Licensor relating to the relevant
       recording artist.

3.4    During the term of this Agreement, Licensee shall post an announcement on
       the Web Site, in form and substance satisfactory to Licensor, concerning
       the license limitations contained in Sections 2.2, 2.3, and 2.4, and, if
       requested by Licensor, include a click wrap agreement in form and
       substance satisfactory to Licensor, for acknowledgement by Web Site
       Users.

4.     TERM

4.1    The term of this Agreement commences on the First Transmission Date and
       ends on December 31, 2001, unless earlier terminated pursuant to this
       Section 4 or Section 8.

4.2    Either party may terminate this Agreement as to the other party if, at
       any time, such other party shall file in any court or agency pursuant to
       any statute or regulation of any state or country, a petition in
       bankruptcy or insolvency or for reorganization or for an arrangement or
       for the appointment of a receiver or trustee of the party or of its
       assets, or if such other party proposes a written agreement of
       composition or extension of its debts, or if such other party shall be
       served with an involuntary petition against it, filed in any insolvency
       proceeding, and such petition shall not be dismissed within sixty (60)
       days after the filing thereof, or if such other party shall propose or be
       a party to any dissolution or liquidation, or if such other party shall
       make an assignment for the benefit of creditors.

4.3    If technology becomes widely available that permits Web Site Users to
       create a separate, complete and usable copy of sound recordings
       transmitted by Licensee, then Licensee, upon notice from Licensor or
       otherwise obtaining information as to the existence of such technology,
       shall make all commercial efforts to prevent the use of such technology
       by Web Site Users. Licensee shall also implement technical protection
       measures, if available, to prevent the use of such technology by Web Site
       Users. In the event that such commercial efforts and technical measures
       fail to prevent Web Site Users from using such technology, then the
       Payable Transmission Rate shall no longer apply and the parties shall
       immediately enter into good faith negotiations to determine an
       appropriate increased Payable Transmission Rate.

4.4    Licensor may terminate this Agreement if Licensee transmits sound
       recordings using multicast technology and fails to maintain a control
       connection or other mechanism with Web Site Users that permits Licensee
       to count reliably the number of Payable Transmissions so that Licensor
       may reliably audit such count pursuant to Section 6.

                                       4
<PAGE>   5

5.     LICENSE FEE REPORTS

5.1    Licensee shall submit a quarterly License Fee Report to Licensor for each
       quarterly period during the term of this Agreement, by the twentieth day
       of the following quarter. Licensee and Licensor shall mutually agree upon
       a form of License Fee Report within sixty (60) days following the date of
       this Agreement. Such License Fee Report shall provide reasonably detailed
       information as to the number of Payable Transmissions during such
       quarterly period and shall be certified to be accurate by an officer of
       Licensee.

5.2    During the term of this Agreement, Licensee shall provide Licensor with
       weekly reports, by the tenth day after the end of each week, regarding
       the sound recordings accessed by Web Sites Users during the preceding
       week. Such reports shall be in a form to be mutually agreed upon by
       Licensor and Licensee within sixty (60) days following the date of this
       Agreement. Such reports shall include information as to use by title;
       artist; album; label; catalogue number; UPC Code (by December 31, 1999);
       release date; ISRC code (when available); number of playing dates and
       times of transmission; duration of sound recording; and such additional
       information as Licensor reasonably requests; provided that such requests
       shall not be effective in less than sixty (60) days from the date of the
       request. In the event Licensee incurs additional actual out-of-pocket
       costs as a result of furnishing such additional information, such
       reasonable costs will be deducted from license fees payable for the
       relevant period(s).

5.3    During the term of this Agreement, Licensee agrees to submit such
       additional information as may be required under applicable rules and
       regulations of the Copyright Office, including without limitation 37
       C.F.R. Section 201.36.

6.     VERIFICATION OF LICENSE FEE REPORTS AND OTHER REPORTS

6.1    Licensor shall have the right to examine Licensee's books and records,
       and Licensee agrees to obtain for Licensor the right to examine the books
       and records of any partner in, or co-publisher of, the Web Site, in order
       to verify any report required by this Agreement. Licensor may exercise
       this right no more than once per calendar year. Licensor shall give
       Licensee thirty (30) days' notice of its intention to conduct an
       examination. Licensee agrees to furnish all pertinent books and records,
       including electronic records, to Licensor's authorized representatives,
       during customary business hours. Such books and records shall be kept by
       Licensee in accordance with Generally Accepted Accounting Principles and
       shall be retained for at least three (3) years following expiration of
       the term of this Agreement. Notwithstanding the foregoing, Licensee shall
       not be required to provide Licensor with the access provided in this
       Section 6.1 if in the preceding twelve (12) months the Licensee's
       independent auditor has completed and signed an audit report for an audit
       that addresses all of the information that would have been requested by
       and made available to Licensor, in which event Licensee shall provide to
       Licensor the audit report, work papers and other information provided to
       such auditor.

6.2    Licensee agrees to provide a third-party Section  selected by Licensor
       (unless Licensee identifies a conflict of interest or other material fact
       that should disqualify the contractor)

                                       5
<PAGE>   6

       with such reasonable additional information and reasonable access to
       Licensee's premises and equipment, and to cooperate with such contractor
       in making any inquiries of Licensee and third parties who provided
       products or services to Licensee, as shall reasonably be required for
       Licensor to verify the accuracy and completeness of the Licensee Fee
       Reports provided under Section 5, including without limitation Sections
       5.1 and 5.2.

6.3    Expenses for any examination conducted by Licensor under Sections 6.1 and
       6.2 shall be paid by Licensor unless such examination results in a
       determination by the auditor conducting such examination that Licensee's
       actual payments for the period examined were more than [***]* below the
       payments required under this Agreement, in which case Licensee shall pay
       the costs of the audit.

6.4    The exercise by Licensor of any rights under this Section 6 shall not
       prejudice any other rights or remedies of Licensor, including any other
       rights of Licensor to dispute any amounts owed to Licensor under this
       Agreement.

7      CONFIDENTIALITY

7.1    Licensor shall provide access to Confidential Information only to its own
       employees, employees of its constituent companies and to an independent
       and qualified auditor retained by Licensor with respect to the
       verification of license fee payments.

7.2    Licensor shall not disclose or make any use of the Confidential
       Information except as permitted in Section 7.1 or as required by law. In
       the event Licensor believes it may be obligated by law to disclose any
       Confidential Information, it shall advise Licensee and cooperate with
       Licensee in seeking to limit the scope of such disclosure and making such
       disclosure subject to a protective order or similar device designed to
       maintain the confidentiality of the Confidential Information. Licensor
       shall implement procedures designed to safeguard all Confidential
       Information.

7.3    Except as may be required by any law, statute, or governmental rule or
       regulation, neither party shall provide this Agreement, or disclose any
       of the terms and rates contained in this Agreement, to any person or
       entity without the prior written consent of the other party.

7.4    Neither party shall issue any press release or make any other public
       statement regarding this Agreement or the transactions contemplated
       herein without the prior written consent of the other party.

8.     BREACH OR DEFAULT

If either party fails to perform any of the material terms or conditions
required of it by this Agreement, the non-breaching party may, at its option,
give the breaching party notice to cure

--------
* Confidential treatment has been requested for the bracketed portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                       6
<PAGE>   7

such material breach or default. Such notice shall describe the nature of such
breach. If the breaching party does not cure within ten (10) business days of
any such notice, any further notice from the non-breaching party, and any
further transmissions shall be fully subject to the copyright owners' rights
under Section 17 U.S.C. Section 106(6), and the remedies in Section 17 U.S.C.
Section 501 et seq. No waiver by the breaching party of full performance by the
non-breaching party in any one or more instances shall be a waiver of the right
to require full and complete performance of this Agreement thereafter or of the
right to terminate this Agreement in accordance with this Section 8.

9.     NOTICES

All notices and other communications between the parties hereto shall be in
writing and deemed received (i) when delivered in person; (ii) upon confirmed
transmission by facsimile device; or (iii) five (5) days after deposited in U.S.
mails, postage prepaid, certified or registered mail, addressed to the other
party at the address set forth below (or such other address as such other party
may supply by written notice):

       Licensee:  Chief Financial Officer
                  ARTISTdirect, Inc.
                  17835 Ventura Boulevard
                  Suite 310
                  Encino, California 91316

                  with a copy to:

                  Lenard & Gonzalez LLP
                  1900 Avenue of the Stars
                  25th Floor
                  Los Angeles, California 90067
                  Attn: Allen D. Lenard, Esq.

       Licensor:  Warner Music Group Inc.
                  75 Rockefeller Plaza
                  New York, New York  10019
                  Attn: General Counsel

10.    MISCELLANEOUS

10.1   This Agreement shall be governed by, and construed in accordance with,
       the laws of the State of New York (without giving effect to conflicts of
       law principles thereof).

10.2   The remedies provided herein shall be cumulative and shall not preclude
       assertion by any party hereto of any other rights or the seeking of any
       other remedies against the other party

                                       7
<PAGE>   8

       hereto. No failure to exercise and no delay in exercising any right,
       power or privilege granted under this Agreement shall operate as a waiver
       of such right, power or privilege. No single or partial exercise of any
       right, power or privilege granted under this Agreement shall preclude any
       other or further exercise thereof or the exercise of any other right,
       power or privilege.

10.3   Whenever possible, each provision of this Agreement shall be interpreted
       in such a manner as to be effective and valid under applicable law, but
       if any provision of this Agreement shall be prohibited by or invalid
       under applicable law, such provisions shall be ineffective to the extent
       of such prohibition or invalidity, without invalidating the remainder of
       such provision or the remaining provisions of this Agreement.

10.4   This Agreement may be modified or amended only by a writing signed by
       Licensor and Licensee.

10.5   This Agreement expresses the entire understanding of the parties and
       supersedes all prior and contemporaneous agreements and undertakings of
       the parties with respect to the subject matter hereof.

10.6   Except as otherwise provided in Section 6.3, each party will pay all of
       its own expenses, including attorneys' fees incurred in connection with
       the negotiation of this Agreement, and the performance of its obligations
       hereunder.

10.7   Licensor and Licensee agree that all obligations of clearance, payment or
       attribution to third parties, if any, including music publishers to the
       extent necessary, union funds and performing rights societies, shall be
       solely the responsibility of Licensee, including but not limited to
       payment for use of the musical compositions embodied in sound recordings,
       if any, and for any liabilities associated with such use.

10.8   This Agreement may be executed in counterparts and by facsimile
       signature, each of which shall be deemed to be an original but which
       taken together shall constitute one agreement.

10.9   Except as otherwise expressly provided herein, this Agreement and the
       rights hereunder shall not be assignable or transferable by either party
       without the prior written consent of the other party; provided, however,
       that either party hereto may assign its rights to any parent or
       subsidiary, or any entity that acquires substantially all of the stock or
       assets of such party in which case such assignee shall assume all
       obligations and rights of such party under this Agreement.

10.10  This Agreement shall not be construed to create a partnership, joint
       venture, agency or other legal relationship between the parties, or to
       form any other legal entity.

10.11  The titles used in this Agreement are used for convenience only and are
       not to be considered in construing or interpreting this Agreement.

                                       8
<PAGE>   9

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

WARNER MUSIC GROUP INC.                 ARTISTdirect, INC.

By: /s/ PAUL VIDICH                     By: /s/ MARC GEIGER
    ---------------------------             --------------------------
Title: Executive Vice President         Title: CEO

                                       9
<PAGE>   10

                                                                       EXHIBIT A

                             OPERATING RESTRICTIONS

The following parameters shall apply to transmissions licensed pursuant to this
Agreement:

1. The Web Site Transmissions shall be streamed only and shall be streamed
[***]*.

2. Except as may be mutually agreed between Licensor and Licensee in writing,
the Web Site Transmissions shall comport with such parameters so that they would
be subject to statutory licensing pursuant to Paragraph 2, Subsection d, Section
114 of title 17, United States Code (the "Digital Millennium Copyright Act").

                                                                  END OF EXHIBIT

--------
* Confidential treatment has been requested for the bracketed portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                       10

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