Launch Adds RealPlayer Platform to Music Site

Brandweek, Nov 20, 2000 by Erik Gruenwedel

As the body count of fallen online entertainment ventures approaches critical mass, Launch Media, owner of the Internet music site Launch.com, today attempted to raise itself above the carnage. The publically held Santa Monica, Calif.-based company announced that Launcheast, its audio and media player, will be using RealNetworks' RealPlayer streaming media technology. It also announced that Launcheast is now available to Apple Macintosh users.

While Launch will continue to use Microsoft's Windows Media Player, the deal with Seattle-based RealPlayer increases Launch's unique user base from five million to 160 million. According to David Goldberg, CEO of Launch, that's a potential Holy Grail for advertisers who want to reach targeted demographics with streaming rich media spots and programming.

"Major consumer brands, including Pontiac, Target, American Express, M&Ms and McDonalds, all want rich media advertising," said Goldberg. "This [deal] will allow us to grow our inventory of ads and do some creative things on the sponsorship side."

Additional components to the alliance involve extending ongoing relationships with RealNetworks, including Launch RealChannel, a graphical "logo" button embedded within the RealPlayer software that links users directly to Launch.com's music content.

Launch, which claims to have an inventory of more than 6,000 licensed music videos, will continue to provide artist features, concert information and other entertainment options to Real.com Guide, RealNetworks' streaming media programming guide.

While Goldberg said the 260-employee Launch is "on target" to reach $38 million in revenue this fiscal year and become profitable next year, the company hasn't been immune to the the hammering that technology stocks have taken on Wall Street. After reaching a high of $27.50 per share of common stock in February, Launch's valuations steadily declined to $3.12 per share on Nov. 14. Net losses for the first six months of the year totaled $24.1 million.

Many entertainment Webcasters, including Pop.com, DEN and Thirsty.com, stumbled as they tried to repackage traditional content for the Internet, and failed to create lucrative business models.

Internet media investor CMGI, based in Woburn, Mass., announced last week that it was shedding non-profitable businesses, including iCast, a streaming video and audio media player similar to Launcheast. The handwriting, it would appear, is on the wall. Or is it?

"[ICast] was in a million spaces," said Goldberg in response. "They were doing comedy, sports, film, music, etc. We never saw them as competing for our users or advertisers. Clearly, there's an ongoing weeding out of the weaker players, and sometimes those players are supported by very big companies."