Share the buzz online with Singapore-based 'Soundbuzz'

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)