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THE INDUSTRY STANDARD'S
B E A T S H E E T
A Weekly Report on the Convergence of Music and the Net
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| http://www.thestandard.com |
Tuesday, June 20, 2000
TOP STORY:
* Launch.com: Taking off or Crash Landing?
NET NOISE:
* CDDB.com
BEATS
* Napster Cranks It; EMusic Shanks It
DOT DOT DOT
* CDnow international no more ... Courtney rules ... More MP3.com
SOUND OFF:
* Can a company like Launch.com buy street cred?
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TOP STORY
~~~~~~~~~
Launch.com: Taking off or Crash Landing?
By Julene Snyder
Lately it seems like you can't turn around without bumping into an
announcement from Launch.com.
Last week brought news of the Santa Monica, Calif., firm's new "Launch
College Direct" program, which promises to bring a "dedicated network
of music content to college campuses." Then came word that Launch will
soon offer "new album previews," allowing fans to listen to audio
streams as early as two weeks prior to release. This week the company
caught the attention of skaters and surfers around the country when it
announced the purchase of the Vans Warped Tour, a traveling fest that
features the likes of the Mighty Mighty Bosstones. The Wall Street
Journal reported that Launch paid "between $12 million and $18 million
for the tour, nearly all in stock."
We figured that with all the press releases flying around, it made
sense to sit down and talk to CEO David Goldberg. It's a good thing,
too: The executive is close to bouncing off the walls about his most
recent move. "The Warped Tour is a media property. People go because
they want to go to the Warped Tour, not because they want to see any
particular band," he told us.
Goldberg sees several opportunities for the company - to give Warped
advertisers an online presence, and to offer Launch advertisers an
offline presence. It also opens the door for Launch to position
themselves as an online ticket broker. "There's a huge opportunity to
sell concert tickets online better than anybody's currently doing,"
says Goldberg. "We believe we've got one of the best ways to sell
tickets; we know where people live and we know what kind of music they
like." Goldberg also sees the "new album preview" as a possible
moneymaker, since those previewing albums have the option of buying
them from the company's retail partners.
The deals may leave Goldberg giddy, but observers aren't impressed.
Lisa Voldeng, president and CEO of San Francisco's Uberbabe Media, is
blunt in her assessment: "Their stock is getting tanked," she says
flatly. "They need to make announcements." Not that they're helping.
On Monday, Launch's stock opened at $8.63 and closed down more than a
point down at $7.38 (the company's 52-week high is more than $27).
Voldeng says that she does "like" the Launch management. "I think
they're moving in some interesting directions. But that said, my main
concern with them is that they're too dependent on advertising. Most
of their revenue comes from advertising, and advertising is a finite
pie and there are lots of people competing for it. They need to
diversify their revenue stream."
The explosion in the number of Launch's competitors, along with the
site's bland appeal, hasn't helped either. "A lot of people are trying
to do this music-portal destination kind of thing, but unfortunately
most of them have such a corporate bent that they're ultimately not
very interesting to people who are rabid music fans." And the Warped
gambit? "I don't think fans buy it," she says, adding that the tour
"is sort of a corporate event to get these alterna-rock-pop acts and
mark them under the rebel banner and sell a bunch of T-shirts,"
For all its flaws, Launch.com may manage to come away from its recent
deals with a bit more street cred. Or, at the very least, a really
cool batch of T-shirts.
Also see http://www.thestandard.com/article/display/0,1151,15978,00.html?nl=bts
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NET NOISE
~~~~~~~~~
CDDB.com
Nothing too fancy here, just a massive database of CD information that
lets you pop a disc into your player without going through any
tiresome data-entry of artist, track lists and genre. For those anal
types who like knowing how to find a particular song from their
collection, this is a pretty nifty way to get organized without having
to do any of the actual organization yourself. Downloads of the free
software and a variety of players take no more than a minute on a fast
connection. The company swears it's "recognized as the most accurate
audio CD identification service on the Web," with "data on all kinds
of music, even CDs with multiple pressings." A recent partnership with
the MTVi Group has added a feature that lets listeners get instant
information on artists with a click, so that you can find out crucial
information like what kind of trouble Eminem's gotten into lately
while you deeply ponder what his lyrics really mean.
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BEATS
~~~~~~~
Napster Cranks It; EMusic Shanks It
* It was another busy week for the little application that could. Last
week, Napster announced an alliance with hip-hop label 75Ark
Entertainment, a subsidiary of NicheMusic.com, to offer exclusive
monthly downloads of unreleased songs from artists like The Coup. But
more interesting was the news that Napster launched a "recently
upgraded New Artist Program, which enables aspiring musicians to share
new music with one another and their potential fans." A delightfully
worded and scrupulously reported Reuters article on the service said
that "The Recording Industry Association of America, the trade group
that represents the major record labels, cast a cynical eye on the
venture." The article went on to quote an RIAA statement that
"Napster's own documents reveal that their only interest in the
unknown artist is to distract the RIAA. In fact, early Napster
promotional material touted Napster as 'the place to go to get away
from unknown artists.'" Last week also found Napster hiring David
Boies, the lawyer who represented the government against Microsoft in
the recent antitrust case. So that's where some of that $15 million in
VC money is going.
* It sounds like dire news to slash your staff by 20 percent, but
EMusic CEO Gene Hoffman Jr. put a rosy spin on his firm's layoff
announcement last week. He told The Industry Standard's Michael
Learmonth that the cuts were only "label-relations staff" who worked
with small indie labels to sell downloads; Hoffman now plans to focus
on signing deals with "large indies and major labels." Whether that's
a strategy that will turn the company profitable remains to be seen,
but one has to wonder about the math involved here. Hoffman said the
40 staff positions cut would save the firm $15 million over the next
year, which means that each of those employees was costing the company
a cool $375,000. I know this is a booming economy, but that's one heck
of a compensation package. Find more number-crunching and The
Standard's story at
http://www.thestandard.com/article/display/0,1151,16031,00.html?nl=bts
Dot Dot Dot
CDnow international no more ... Courtney rules ... More MP3.com
The downward spiral for CDnow continues. Bloomberg reports that the
beleaguered company recently closed its only international office in
London as part of an ongoing plan to reduce losses, which have totaled
a whopping $212 million since 1994. The company says it continues to
search for investors and/or merger partners. ... Now that the text
of Courtney Love's speech that lambasted the traditional music
industry to the Digital Hollywood online entertainment conference was
featured on Salon.com, more than one wag has suggested that the site
hire her as a regular columnist. Courtney vs. Camille? As Mills Lane
would say, Let's get it on. ... MP3.com CEO Michael Robertson's
declaration in support of the injunction against Napster last week
prompted howls of protest in forums across the Net, garnering
Robertson epithets ranging from "the devil incarnate" to sobriquets
too incendiary for even us to repeat ...
SOUND OFF
~~~~~~~~~
This week's question: Can a company like Launch.com buy street cred?
E-mail your opinions to julene@well.com with "sound off" in the
subject line, and we'll print a selection of the responses in next
week's newsletter. Letters may be edited for clarity and length, so
keep them short and include your name and affiliation, if any.
FEEDBACK
Last week's question: Would you pay a fee to listen to music you've
already paid for once?
"Ha Ha Ha Ha Ha Ha. Seriously, what's the real question this week?"
- Ron Currier
"Of course I would. How many times have you bought a CD and played it
over and over again to start with and then hidden it away for months,
even years without playing it? I know I have. I'd be happy to
pay-per-play if it meant that I paid only 25 cents per play rather
than $3 for the track to keep it forever. Pay-per-play gives me more
choice and in the end that's what every consumer wants. New systems
like Magex and others are going to give me this choice, and I'm all
for it." - Jimmy Huwe
"No F***ing way! I'm not the only person that is sick and tired of the
major record labels ripping off both the artists and the consumers!
Why on earth would I want to pay the outrageous and artificially
inflated prices being charged for CDs and then pay again for the
privilege of my listening convenience? I fully support the rights of
the artists to be compensated for their hard work and talent. But I
also am aware that only a tiny percentage of the money I shell out for
a CD actually goes to the artist. Will the labels be willing to
guarantee me that all of the additional money I would be asked to pay
for this listening privilege would go directly into the pockets of the
artists? If so, then I might be more amenable to the added fee. I'm
holding out for the day when I can go directly to the artists' Web
sites and download their music directly to my hard drive/portable
player/home stereo system on a pay-per-track basis. Then I'll know
that my money is going to compensate the artists I love, not line the
pockets of the recording executives whose only talent is fleecing
others." -Shari Buckner
"That's basically 'renting' a song. Not an appealing idea at all!
Music is the food for the soul, and it creates great moods and
moments. Therefore I'd want to own it so that I won't have to look for
my credit card each time. One comment regarding music on the Net (much
like anything else on the Net): The Internet is like the flow of a
strong river - it's hard to change its course. The strong current will
eventually find its way no matter how hard you try to manage it."
- Emre Barzilay
STAFF
~~~~~
Written by Julene Snyder. Send news tips and press releases to
julene@well.com.
Edited by Steven Zeitchik (szeitchik@thestandard.com).
Copyedited by Elese Veeh (eveeh@thestandard.com).
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