Liquid Audio Scores $20m To Advance Web Music System

Computergram International, August 19, 1998

Liquid Audio, provider of secure internet music delivery technology, has bagged $20m in a third round of private financing. The Redwood City, California-based company says it will use the money to further develop and market its system for mastering, publishing, previewing and purchasing CD-quality music over the internet.

Principal investors in the round include MediaOne Interactive Services, Inc, an unnamed affiliate of Metromedia Company, Hummer Winblad Venture Partners, Intel Corp, Phoenix Partners and Paul Allen's Vulcan Ventures group. This round of financing also sees some of the investors entering agreements with the company for the long-term development of online music distribution. Along those lines, MediaOne Interactive and Metromedia will work with the company to help develop technology to deliver music via broadband. The company said the additional funding positions it well in the marketplace and that it currently has no timetable for a possible public offering. The Liquid Music System, through the use of encryption and digital watermarking technologies, can individually identify masters of copyrighted music content and protect against illegal duplication - something that is critical to music publishers and record companies if the web is to become an accepted medium for music distribution. The company has been working to establish its format as an industry standard for record labels, musicians and movie studios - including DreamWorks SKG and Warner Bros Feature Animation, both of whom have licensed the company's Liquid Express technology for managing sound libraries used in the production of films. Several major record companies are currently using Liquid Audio technology to promote music via the internet including EMI/Capitol, MCA, BMG and Interscope. More than 150 independent record labels and artists are also in the fold. Liquid Audio has strategic relationships with the likes of Microsoft Corp, whose NetShow streaming technology is being supported by the next version of the Liquid Music System; RealNetworks Inc, with whom it developed an music player extension for the popular RealPlayer; and Dolby Laboratories Inc, whose sound technology Liquid Audio has licensed. The company also claims partnerships with publishing rights agencies ASCAP, BMI and SESAC. International licensees for its technology have come from Japan, Germany, Italy, the UK and Australia.