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From...
Industry Standard

Music talent scouts are surfing the Net

June 17, 1999
Web posted at: 2:21 p.m. EDT (1821 GMT)

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by Lessley Anderson

(IDG) -- Becoming a rock star has never been easy. For an artist with no contacts, getting discovered has traditionally meant hard work and a lot of luck basically, playing in various bars until someone from a major label walks through the door.

The Internet offers an opportunity to bypass that someone. Because the Web lets artists spread the word and sell music more cheaply, bands can "break" without the backing of a major label.

Or so it seems. But it hasn't happened yet, and the sheer volume of material available on the Web plays into the hands of the labels. Overwhelmed consumers don't have time to sort through hundreds of songs they may not like.

New sites are jockeying to perform some of the kingmaking functions usually left to major labels. Unexpectedly, however, the Web is helping the labels do what they've always done find more talent through a new breed of middleman.
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In the past six months, consumers have found it much easier to listen to new music. Increased bandwidth, new devices like the Rio and easy-to-use apps like Real Jukebox have inspired a host of competing MP3-related startups. Few such sites will be able to forge download deals with major labels, or even popular independent labels. In order to survive, they'll need to find and market their own talent.

"Who is going to break the first artist in this realm?" asks Ken Hertz, an entertainment lawyer and Net enthusiast in Los Angeles. "If a new artist came to me and wanted to make a deal with a label, I'd say, 'Wait, let's put it up on the Web first.'"

That's easy for Hertz to say besides representing big-name artists like Alanis Morissette, he also represents music site MP3.com. MP3.com, Riffage.com, Musicosm and Tunes.com hope to succeed by claiming new talent of their own. MP3.com offers thousands of downloads from undiscovered bands, with no filtering to weed out the good from the bad.

So far, no band has "broken" (either been signed to a major label or developed a significant fan base) as a result of its availability on MP3.com. When the majors begin to sell the music of popular artists the same way, will consumers seek out unknown artists on MP3.com? They might, if they know they can get something good for free. MP3.com needs to break a band.

Tunes.com hopes to make headway against MP3.com and others through a more traditional route, by capitalizing on its relationships with music magazines. The Web force behind RollingStone.com and TheSource.com, Tunes.com lets artists build their own homepages and attach MP3 files. Editors from Rolling Stone and The Source will evaluate the bands and publicize the best ones on the site's front page. More than 600 bands have used the feature since it launched last month.

New talent is guaranteed to emerge from Tunes.com's pages, but the quantity of submissions will probably lead to some old-fashioned favoritism, according to undiscovered San Francisco musician John Pike. Pike says he holds little hope that RollingStone.com will recognize him.

"There will be so much music," he sighs. "It will be the same. The editors will listen to stuff that someone they know has told them to listen to. Or they'll know someone in the band."

As Pike points out, just because a business is based on the Web doesn't mean it offers a new business model. But other outlets are springing up to satisfy consumers whose tastes don't match those of Rolling Stone editors. Traditional retailers, worried that digital distribution will spell their demise, have begun looking for proprietary content of their own.

Hugh Hilton and Jason Fiber, the brains behind Wherehousemusic.com, an affiliate of the Wherehouse Music retail chain, say their site will soon offer an MP3 download feature so users can find new music. They plan to use Wherehousemusic to break new bands.

"All the stores we have are a powerful inducement for an artist trying to decide where to go," says Hilton. "With a label, it's all about 'How do I get my music into the retail world?'"

Fred McIntyre, Web radio company Spinner.com's VP of strategic partnerships and label relationships, is skeptical. "They've got to negotiate contracts, and help produce the music, market and package it. That's just not a retailer's core competency." Again, major labels have an edge.

Net radio companies like McIntyre's Spinner.com represent another facet of the new process by which companies scout new bands. Artists have always needed radio to sell records, and radio remains the best way to introduce potential buyers to a new artist. Labels employ salespeople to get their singles on the air.

But what if Net radio becomes so big that no one listens to traditional radio anymore? According to Arbitron, 40 percent of Americans listen to the radio at work. Meanwhile, more and more people are working on PCs.

The biggest ISP and Net media company around America Online (AOL) just bought Spinner.com, so traffic on the latter is likely to go way up. Spinner has so far shown more interested in working with established bands in order to boost traffic it's planning an exclusive promotion with Warner Bros., for example, to stream tracks from the new Red Hot Chili Peppers album.

Eventually, managers or attorneys like Hertz might bypass a label and its longstanding relationships with terrestrial radio stations to wrangle some Net radio airtime for their artists. For now, though, the labels offer something Spinner can't get elsewhere a built-in audience.

A parallel digital universe complete with new digital record stores and Net radio stations that negate the importance of major labels is still hypothetical. Majors control more than 80 percent of U.S. music consumption.

Those numbers leave room for new A&R middlemen, and Braden Merrick is filling the niche. A San Francisco-based entrepreneur, Merrick runs RedButton.com, an e-zine and music channel that showcases mostly local bands. It also makes available the singles he prefers. Word in the industry is that Merrick has a good ear, so his site has become a bookmark for some A&R scouts at the labels, who tune in every Wednesday to see what's new.

Merrick also e-mails a tip sheet called Matchmaker to a list of 750 people, which includes song files.

"Braden's artists are worth hearing," notes Chris Douridas, who handles A&R for Dreamworks. Douridas uses Merrick's site, and to a lesser degree MP3.com, to find potential new acts. He says it's only a matter of time before Merrick signs a band to a major.

That's Merrick's ultimate goal. He also hopes that when it happens, RedButton will retain a few digital rights. RedButton invests several thousand dollars in its favorite bands and asks them to sign nonexclusive digital distribution agreements. Merrick hopes those agreements will hold water when a band sits down to carve out a deal with a major label.

"The label might want them to take down their MP3s from our site," says Merrick. "But it's my hope that the band will remember us, negotiate to keep them up." He laughs. "Of course, it's all about love until money comes into the picture."


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