Los Angeles Times - January 24, 2000

January 24, 2000, Monday, Home Edition

SECTION: Business; Part C; Page 4; Financial Desk

LENGTH: 360 words

HEADLINE: MUSICBLITZ.COM GIVES IT UP FOR MARKETING;
INTERNET: ALTHOUGH FREE TO CONSUMERS, L.A. START-UP HOPES TO LICENSE THE NEW SONGS FOR USE IN HOLLYWOOD.

BYLINE: KAREN KAPLAN, TIMES STAFF WRITER

BODY:
While major music companies are fighting the proliferation of free music on the Internet, a Los Angeles start-up is trying to cash in on this trend by giving away new songs by popular artists.

MusicBlitz.com has already recorded new music by 30 artists, including Grammy Award winner Taj Mahal, Golden Globe nominee Aimee Mann, reggae group Wailing Souls, and pop singers Ricky Bell and Ronnie DeVoe of New Edition and Bell Biv DeVoe. Starting today, listeners can hear the songs for free on the Web at http://www.musicblitz.com.

"The Internet allows us to take music, bypass MTV, bypass radio stations, and go directly to consumers," said MusicBlitz.com founder Kevin Nakao.

But Nakao, the company's chief executive, doesn't plan to give the songs away to everyone. The former music executive at Launch Media, 20th Century Fox and MCA Records hopes to collect royalties by licensing the songs for use in movies and television shows.

MusicBlitz.com plans to use feedback culled from its Web site--to sort the popularity of these songs by demographic groups--to help pitch songs to Hollywood.

"Consumer data is one of the major forms of currency on the Internet," said Aram Sinnreich, an analyst with Jupiter Communications.

Nakao said his company has enough venture capital to stay in business for about 16 months. The bulk of that money is going to pay artists to produce songs for fees ranging from $ 5,000 to $ 25,000. (Singers also receive royalty payments each time a song is downloaded and if their songs are licensed for movies or TV shows.)

In addition to charging licensing fees, the company also plans to make money by selling CDs in retail outlets, by selling ads on its Web site and by marketing artists for record labels. As its database of listeners grows, MusicBlitz.com also plans to generate revenue through affiliate marketing deals.

"You can make a lot of money by giving away your crown jewels for free," said Geoffrey Bock, a senior consultant at the Patricia Seybold Group in Boston. "It's a good way of generating a lot of interest . . . and once you do that, you can monetize the relationship in other ways."

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