Select Music in Santa Ana said it has been acquired for an undisclosed sum by AEI Music Network in Seattle as part of AEI's plan to become more competitive with giant Muzak in the prerecorded music service business. Select Music, which had about 400 customers, has been merged into the Orange office of AEI, which has about 36,000 customers nationally. Walt Tatum, former owner of Select Music, has been named AEI's general sales manager for Orange County. AEI first moved into the Southern California market in 1981 by opening a Los Angeles office. Last month it purchased Tune Time in Studio City, which has about 2,500 customers. Based on customer count, AEI is about a fourth the size of Muzak. AEI charges customers an average of $600 a year for providing classical, jazz, country and rock music programming transmitted by satellite.