In addition to all the companies building their own digital music stores, Loudeye now offers a prepackaged program that companies can brand. When middlemen start popping up, you know a business is maturing:
- Seattle-based Loudeye and the software giant said Monday that they will work together to handle the infrastructure and distribution for online music services branded by other companies that are looking to sell songs online or to enter the digital media business in some other way.
Loudeye’s digital music services, which include its Digital Music Store and iRadio Service that contains 100 preprogrammed music channels, are based on Microsoft’s Windows Media 9 Series technology. Early customers of the service include AT&T Wireless and Gibson Audio, a division of Gibson Guitars.
“The problem for companies that want to launch a digital media service with their own brand is that it’s very expensive,” said Loudeye Chief Executive Officer Jeff Cavins. “We’ll charge them a fraction of the cost of what it would take to build it themselves.”
….Loudeye’s Cavins said there is room for an intermediary in the business despite the tiny profit margins. His company is looking for customers who are interested in digital music distribution as a promotional tool for another product or service, rather than as a standalone business, he said.
“There are a lot of companies that are not your usual suspects that will pay to have services that will drive cross promotion,” Cavins said. “What it comes down to is that there are companies that are learning that using digital media is a good way to cement a brand.”
….Loudeye has previously focused on encoding and storing digital music for other services, including iTunes, and providing samples of music for CD sales outlets such as Amazon.com. [CNET]
More on AT&T Wireless and Gibson Audio from the Hollywood Reporter:
- AT&T Wireless plans to create its online music store as part of that company’s mMode service. In what AT&T Wireless said was a first, all sufficiently advanced phones will be able to sample and buy entire songs and ring tones beginning early next year.
“As technologies advance and converge, the wireless phone will become the next major platform for music content delivery, and AT&T Wireless will be at the forefront this transformation,” said John Bunyan, senior vp consumer data offers at AT&T Wireless.
Cavins added that using the existing billing relationship removed a barrier to consumer purchasing, especially for younger people, who might not have a credit card.
Gibson Audio is using Loudeye’s new offerings in conjunction with its first consumer electronic product, the Wurltizer Digital Jukebox. This new device, which can store the equivalent of 1,000 CDs in Windows Media format, gives its users 100 channels of digital radio as well as a download store, both powered by Loudeye. Listeners control the music from a wireless touch-screen remote designed to fit Gibson’s user-friendly philosophy. It will be unveiled at the Consumer Electronics Show next month.
….The unit’s hand-held touch-screen remote can display color album cover art and other information, whether a download or the consumer’s own CD is playing because it is powered by Loudeye. It also has many options for organizing and burning a music collection. Retail pricing has not yet been determined, but it is expected to sell for well less than $2,000.
This part is key: “His company is looking for customers who are interested in digital music distribution as a promotional tool for another product or service, rather than as a standalone business.” Music will be used more and more as a branding tool and loss leader to sell other things or just promote corporate image