Share the buzz online with Singapore-based 'Soundbuzz'

By Vishnu K. Mahmud

JAKARTA (JP): Is it truly the end for online music sites? Napster.com, the recent darling of the net, is now faced with dwindling traffic and increasing legal fees. The company's breach of copyright (as the summary judgment states) and its ease of use for music sharing have brought down the wrath of the recording industry, which feels it was not properly compensated or consulted.

MP3.com, another former Internet favorite, is now planning to charge users for a service that used to be free. The site's "Payback for Playback" online royalty scheme, where unsigned, independent artists can earn a little money whenever visitors listen to their music, is now subject to a monthly $19.99 fee. Will music ever be distributed again via the Web?

Of course, says Sudhanshu Sarronwala, CEO of the Singapore- based Soundbuzz.com. "The Internet," he says, "is a perfect retail medium. Production, packaging and transporting costs are gone. Music can be delivered with a digital sale online."

Sarronwala was in Jakarta for the launch of NuBuzz, a joint venture between Soundbuzz.com and Jakarta's Prambors radio station to support Indonesian independent artists with new media (the Internet) and traditional ones (radio). Prambors will have a weekly one-hour program that showcases new talent, while Soundbuzz promotes and issues the music in digital form online.

When asked about Napster or MP3.com, Sarronwala points out that neither focused on protecting the copyrights of the music. Both sites have massive marketing machines and top-class music- sharing engines. However, the companies did not consider the reaction of artists or the recording industry, which predictably went ballistic.

"Music sharing is OK one on one," he smiles. "But 65 million?"

Soundbuzz is not only an Internet music site but also a digital music retailer. Instead of being a sole source of license-free music by independent artists or a haven to download the latest tunes, Soundbuzz also sells music online digitally in partnership with the recording industry (in this case EMI and BMG music companies, along with 15 regional labels).

Soundbuzz also has agreements with BMG Publishing to source new songwriting talent. Using the Internet site, an artist can upload their sample music for the entire world to see. If it gets a "buzz" by the site or its users, Soundbuzz can present the talent (be it singer or songwriter) to their partners for a first review before it is offered to other music labels. This is an interesting way to be "discovered", via the Net. To get the music out and critiqued by the general public is one way to break into the industry.

Win-win solution

Soundbuzz offers a win-win solution to all. Using Intertrust and Liquid Audio Digital Rights Management system (DRM), all downloads will be digitally signed so they can only work on one computer: the buyer's. Any attempt to play it on someone else's system will be met with a request to purchase a license online.

Although that may sound like a nightmare to some (Microsoft is reported also to be going down the same route with their upcoming Windows XP Operating System), Soundbuzz can safely distribute music to the masses and ensure the proper parties are paid. And making sure the artists get paid allows for more music to be created.

As a digital distribution aggregator for music, the company targets many mediums beyond the Web. MP3 players, cell phones (with music playback capability), handheld Personal Digital Assistants and Internet Service Providers are all potential means to distribute music efficiently and effectively. For Soundbuzz it is a source of revenue, and for the hardware vendor it is a value-added service.

Sarronwala is extremely bullish about the Indonesian digital market. He predicts that music content can be moved via wholesales (in partnership with various hardware devices such as cell phones and the like) and then move to retail sales after more people go online.

"People will always buy music. It's a necessity of life," he says.

As for payment, the site is not only targeting credit card owners. With the convergence of media, Soundbuzz is still exploring methods of payment convenient for users. Payment via a telephone bill, cell phone, Internet Service Provider and others are just a few methods that can help e-commerce boom in Asia.

As for the revenue model, Soundbuzz is targeting revenue from partnerships, sponsorships of various kinds in Asia, licensing digital media and profitsharing. The company, Sarronwala says, does not want to blunder like other dotcoms that only began to search for a revenue stream after it was too late.

As for profitability, he says: "Someone who is creating an industry cannot make a profit in 30 days." The company targets to break even within two years.

The company has strategic investors such as Creative Technologies (which produces Sound Blaster audio cards and the latest MP3 players) as well as EMI Records. There is no venture capital money (currently a bad word for Internet startups), which usually seeks high profits in a short period. Another investor is Singapore Telecom, so a potential telecom-media convergence may be just over the horizon.

Soundbuzz is perhaps an excellent example of how to do business online. It does not focus on capturing market share or global expansion while neglecting revenue models. It instead concentrates on win-win partnerships, market needs (not trends), product testing (carried out for about a year before launching their commercial venture -- online music sales) and smart business acumen. The Web does not offer a substitute for poorly thought-out business plans.

As for the problems of downloading music over the web, Sarronwala grins.

"Eighteen months ago no one talked about downloading anything but now they talk about it. In another 18 months we won't be having this conversation."

Nowadays, people (with the help of downloading software) in Indonesia are taking their time or at least seriously considering downloading large files (3 megabytes and above). It seems that consumer behavior in this regard has changed and Sarronwala is confident that consumers will pay for music instead of grabbing it off the net for free. (vmahmud@yahoo.com)