ONLINE MUSIC
Thomas Dolby Robertson was one of the first musicians to embrace the Web as a business - perhaps too soon for his own good. Headspace, an interactive audio site he incorporated in 1996, has struggled to establish itself, seeming at times more like a pop star's hobby than a profit-seeking venture.
But recently, the site - renamed Beatnik - has been making some real noise. Last January, Beatnik hired seasoned tech executive Lorraine Hariton as president and CEO. The company also merged in November with Mixman Technologies, maker of the remix software that lets any putz front like Fatboy Slim. Plus, Beatnik secured $11 million in venture capital last fall and landed a major partner, Yahoo!, which has started serving up Beatnik GrooveGrams to its mainstream millions. Perhaps most important, Beatnik has settled on a coherent business model.
"We want to be to interactive audio what RealNetworks is to streaming media," says CEO Hariton.
Beatnik's biz revolves around the sample-friendly Beatnik Player. Unlike the RealPlayer, Beatnik's device works like a synthesizer: You can play it without having to stream files each time you want to call your own tune. With Beatnik software, Dolby Robertson explains, "a Web site sends the sheet music, not the song itself, so there's no bandwidth problem."
Beatnik is banking on many streams of revenue. The company charges for an enhanced version of its Beatnik Player (the basic one is free) and for sales of Mixman software. Beatnik receives licensing fees from companies that preinstall the Beatnik Audio Engine in operating systems, game gear, or set-top boxes - for example, it's built into Microsoft's WebTV Networks. There are additional licensing fees coming from music sites (MTV Online), professional musicians (DavidBowie.com), and homepagers who use the enhanced Beatnik software.
Not everyone, however, is blinded by Beatnik's science. "Because the business is based on downloads of the player, they really need to focus on better distribution," says Aram Sinnreich, an analyst at Jupiter Communications. "They've got the site with Yahoo!, but there's no call to action - nothing that says, 'Click here.'"
It remains to be seen whether online remixing is the fast track to the big time. But at least one marquee player is convinced it will be a hit: rapper Ice-T, who recently spent a weekend working with Mixman Studio.
"It's the future," Ice-T says. "It gives artists a new way to promote themselves, and people a new way to spin records. It's cool." A Beatnik's ultimate praise.
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