While Consumer Online Music Sites Struggle, Professional Use Thrives

Gerd Leonhard is looking at the future of digital music through two windows on his laptop.The first window shows a post-holiday Reuters story decrying that there was ""No Santa for the Internet Music Industry."" The second window is running a preview of the feature film, ""The Company Man,"" an upcoming Paramount Classics release using music that was licensed via Leonhard's Web site, LicenseMusic.com. For LicenseMusic.com, Santa came through after all.Downloadable music for the professional market is a side of the audio Internet world that isn't often discussed. Movie, television and multimedia producers are well into the MP3 revolution, using downloadable audio for their productions like it's second nature. Meanwhile, the consumer world is online music's hyperactive child, clamoring about piracy, fairness, credibility and revenue.Leonhard is President/CEO of LicenseMusic.com, an online music hub that licenses and downloads professional-quality digital music specifically for the audio-visual production industries worldwide.While most consumer-based online music companies are experiencing low sales numbers, business-to-business sites like LicenseMusic.com are entering 2000 with a smile, knowing that although the public didn't quite adopt Web music in 1999, the content creation industry did. Nowadays Leonhard can't help but chuckle a bit as one ""expert"" after another hems and haws about why so few stockings were stuffed with digital music.""While digital music will most certainly be adopted by the masses soon,"" says Leonhard, ""the online music industry is starting to recognize that business-to-business could be a more appropriate and revenue-generating use of the Internet. The media understands that too, they just like the controversy of the consumer music debate.""And debate they have. There seems to have been a race among the press to be the first to lambaste the lackluster digital music sales this past gift-giving season. ""It looks like the online music industry will have to wait,"" Reuters reported, ""while other Internet businesses, from selling books to booking tickets, are ringing up billions of dollars in sales.""The same story quoted ""MP3 for Dummies"" author Andy Rathbone bluntly: ""It (the digital music business) hasn't taken off as much as analysts expected.""""The CD didn't die in 1999,"" declared CNET. ""Many obstacles stand in the way of the day when the masses will click, pay and carry away digital music."" The portable MP3 players haven't fared any better, with Rolling Stone concluding that they ""still have a long way to go before they become the gadget of choice for mainstream consumers.""""At the moment,"" Leonhard says, ""many consumers are not really that excited about downloading music via the Internet. The pricing still reflects old-world, offline thinking. The selections are limited and there are few really compelling sites to go to."" In other words: Nice try guys; better luck next year.""It's going to take a while for the typical American consumer to get used to buying a downloaded file of music,"" concurred the Dallas Observer. ""They still want a CD. They still want a jewel case and artwork and all that stuff.""The Observer went further to even scold MP3 companies: ""Online music distributors are among the few start-up companies that manage to stay up longer than it takes to download their products. And all too often, they do it by balancing on the backs of musicians who don't know how much their product is worth.""Leonhard can't fairly join such a discussion. His company is recording one sale after another, which doesn't happen on the consumer side. ""At times it seems like we are in an entirely different business,"" he says. ""The digital music sites targeting consumers seem to have more hurdles than they have customers. LicenseMusic.com is quite the opposite. Piracy isn't a concern because we focus on licensing to business professionals.""Our customers are actually trying to avoid the inefficiencies of discs and jewel cases, not build a CD collection. And we're racking up sales to professionals who won't ever e-mail the music around a dorm floor.""But despite all the media noise about digital music, the message is getting through. LicenseMusic.com-distributed tracks are now heard on a long list of productions. Some notables include the PBS New Year's Eve television special, feature films like ""Company Man,"" a Stamps.com commercial, the web site for New York's Whitney Museum (www.whitney.org) and even special corporate projects for companies such as Compaq Computers and Bank of America.The players in the Internet music game are dividing into the haves and the have-nots. On the latter side we hear EMI Records' Jay Alan Samit on Nightline saying, ""This year over a billion songs were downloaded. None of our artists got paid.""On the former side is a wealth of record companies, artists and production professionals adopting LicenseMusic.com's more universally beneficial application of the technology.""We have found the digital medium to be less than perfect, as it takes substantial advertising dollars to get people to your site. Then you almost have to put a gun to their head to get them to buy something,"" says Jason Thomas, Director of Operations at Attack Records. ""We feel that LicenseMusic.com has the most advantageous avenues, as there are very few sites doing what they do. """"There aren't many people doing what they're doing,"" agrees Allan Fried, COO of KnitMedia (www.knitmedia.com), a worldwide multimedia entertainment company that utilizes LicenseMusic.com as an outlet for several of its record labels including the genre-bending Knitting Factory Records (www.knittingfactory.com).""Our music lends itself to visual productions, much of it being instrumental, but we don't have a person devoted full time to pitching music supervisors. LicenseMusic.com increases our exposure to the film and television community.""""We are happy to note that two of our tracks have been placed in an independent film to be released in early 2000,"" notes Jean Luc Barreau, head of record company Herisson Vert. ""We are reaching a much wider international audience, markets we wouldn't be reaching without LicenseMusic.com.""And when you can get customers' business while making their lives easier as well, it's an added bonus. ""I recently became familiar with LicenseMusic.com when I had some last minute music cues that had to be filled on 'Company Man,'"" said Karen Morrow, music supervisor on the film. ""I was able to preview the music from the web site and receive the cost and credits for the tracks, which is a valuable service especially considering the tight post-production schedule I was facing.""So while the consumer music web sites scramble to make next year's holiday better than the last, LicenseMusic.com has no worries. There might be MP3 under the next Christmas tree, but there will definitely be MP3 in the next Christmas movie.