Music Mavens

Brandweek, July 17, 2000 by Erik Gruenwedel

The team at Soundbreak.com wants to give users the music that they want. But is anyone listening?

To hear Mark Goodman enthusiastically describe West Hollywood, Calif.-based interactive music destination Soundbreak's mission statement may require ignoring the realities of the struggling entertainment dot-com space and admire the gospel of a true believer. After all, Goodman, who was an original VJ at MTV and now serves as Soundbreak's vice president of music programming, knows the risks as well as the potential windfall of charting new ground.

"I don't know of anyone who is doing what we are doing musically on the Internet," says Goodman, who, not surprisingly, sees himself less as a music executive and more as an evangelist. "There are terrestrial radio stations streaming their signals [online]," he says. "There are aggregate sites streaming different formats so you can click on alternative country and come up with really boring songs. And then there's us."

Launched in February by Pasadena, Calif.-based incubator Acacia Research Corp., and backed by almost $27 million in private equity funding, the 85-employee Soundbreak claims to offer a "robust Web experience" via live digital jocks, 24-hour global music Webeasts, state-of-the art graphics, e-commerce, message boards, chat, games and animation--in short, the usual interactive entertainment fare found on a host of competing sites.

Goodman says Soundbreak broadcasts "free-form radio," which essentially involves a playlist targeting the requisite 15-to-35 demographic that is computer savvy, flush with disposable cash, attitude and keen on Eminem, Kid Rock, Dr. Dre, Green Velvet, Limp Bizkit and Korn, among others.

"It's like walking down the hallway of a college dorm," he says. "You would hear different music coming out of every room. That's what Soundbreak is."

Despite the well-documented failure of several entertainment sites this year, Soundbreak intends to become an online entertainment media company specializing in audio and visual content available in multiple languages, restricted only by bandwidth and market forces, according to Lisa Crane, CEO and president of Soundbreak.

"We believe we're creating a second-generation Web site or Web business," says Crane. "We've pulled things from cable, print and other traditional media, which means we've learned from the successes and failures of business both offline and online."

Crane says research, focus groups, scrutinizing other business plans and talking with people enmeshed in the medium helped develop Soundbreak around what the consumer wanted and wasn't getting with online radio.

"[Content on the Internet] has to be plug-and-play, which means it goes way beyond an early adopter phase," says Crane, who cut her dot-com teeth as general manager of NBC.com and before that as vice president of UniversalStudios.com. "People want to be entertained when they want to be entertained and interactive when they want to be interactive. But they don't want to be told when they have to do each."

As an example, Crane cites the frustration of hearing a new song on the radio and not knowing the name of the tune, artist or where to buy it.

"It's a common experience," she says. "So we decided to put the music together on the Internet in a way that's consumable."

While listening to a song or watching a video clip, browsers can click on a button and get a biography of the artist as well as the opportunity to purchase it on the spot. In addition to video cameras transmitting visuals of in-studio artists, Soundbreak also archives a one-week backlog of shows to allow users the option of retrieving past songs and guest appearances.

"The days of trying to figure out the name of a song, remembering what it sounds like and then going to Tower Records to hum it to a 16-year-old clerk are hopefully over," says Crane.

To support this c-commerce strategy, Crane produces secondary data that suggests the global online music market for CDs, digital recordings, etc., will surpass $7 billion by 2003--$4 billion of which is in the U.S.

"That's $3.35 billion nobody is going after," says Crane. "That's insane. It's unbelievable how much money is out there."

In addition, Crane claims 28 percent of the $52 million spent by advertisers annually on alternative music radio is based in the U.S.

So how much of this revenue largess has Soundbreak snagged?

"We've just begun getting the word out in the past month," concedes Goodman. "We made a conscious effort before we launched that we wouldn't have any advertising [on the site] for the first several months."

Crane says there were two ways Soundbreak could have approached advertisers. It could have taken on a few, promised them the world, not delivered and spent an eternity doing make goods at an established value that was too low to begin with.

"We didn't want to play that game," she says. "Instead, we went out for a few months to build our traffic, get picked up by Media Metrix and PC Data Online, establish a fan base (expected to reach 1 milion by September, Crane claims), and then go to advertisers on much stronger footing and establish a price that is much higher."