EXCLUSIVE: After months of talks to sell the the music information and download service, Ryan Kavanaugh’s company has nailed down a deal with an undisclosed buyer for about $1M, according to a source close to the studio. The agreement covers the artistdirect.com website plus assets associated with it which include musicandirect.net, ubl.com, ultimatemusic.com, and playlisted.com.

With the transaction, the company will cut a handful of positions at Relativity Digital Studios. At least some of the savings will be reinvested into digital productions. For example, last month it announced an alliance with Lexus to develop content for its L/Studio broadband channel (LStudio.com). Those remaining with ArtistDirect will be able interview for positions under the new owner.

The tiny price suggests how hard it’s been to stand out in a music market dominated by services including Apple’s iTunes, Pandora, and Spotify. Relativity bought ArtistDirect for well under $1M in January 2010, months after the music service delisted its stock. In its last annual report, ArtistDirect said it generated $12.1M in revenues in 2008 — but with nearly $48M in losses.

Those with long memories may recall how ArtistDirect began in 1994 as an online music retailer and distribution company with big ambitions. It teamed with the Ultimate Band List (UBL.com) in an attempt to become a one-stop destination for people who wanted to buy and learn about pop music. UBL.com now concentrates on independent and unsigned bands. ArtistDirect went public in March 2000, a week before the market’s dot-com bubble burst.