Internet - Profiles of Successful Internet Businesses
Music to their Ears: Virtual CD Stores

Home

Return to
Profiles

Music to their Ears: Virtual CD Stores

EMusic (emusic.com) founder Mark Chasan has been passionate about music since he was ten years old. He started playing drums and percussion and later studied music and piano in order to write and arrange his original compositions. Although Chasan’s passion for music has continued over the years, at age twenty-two, Chasan’s love of music was exceeded by his distaste for poverty, and he pursued a career in law. After twelve years as a lawyer, Chasan returned to his passion and his dream and created EMusic.

Like Mr. Holland of the movie Mr. Holland’s Opus, who found satisfaction in teaching music, Chasan found on online music business with a similar satisfaction. He founded EMusic, he says, “so music lovers from all over the world could easily browse a huge music catalog containing just about every music title commercially available.” He also wanted them to be able to communicate with others who enjoy music and expand their musical horizons and tastes. Last but by no means least, Chasan wanted them to be able to buy the music they loved at discount prices and have it delivered directly without regard to geographic location. Thanks to the Internet, he did it.

The music industry is one that truly will be rocked by e-commerce because online revenues already account for $71 million of the $12 billion that consumers spent on music in 1996. Analysts predicted that would double by the end of 1998.

By the year 2002, the online music market is expected to reach $4.5 billion. The compact disk changed the music selling business, then the advent of the big chains and superstores like Tower changed it some more. Now the Internet has added still another dimension. Like online bookstores, online music stores have huge data bases for searching for disks of a particular artist, music genre, or song title.

Tower Records (towerrecords.com) claims to have sold more than 200,000 music titles and 3,000 music videos online and earns about $800,000 per month through its Web site. Their market share of 14 percent of the online music business is helped by a relationship with America Online.

The bookstore, Amazon.com is building up its music arm. Columbia House, a mail order music club owned by Time Warner and Sony is expanding its online business and offering members a discount incentive if they use the Web site to respond to their mail order bulletins. BMG Music Service, another club, has a presence online.

CDnow was one of the first online-only CD sellers (and also claims to be the world’s largest music store, with 250,000 titles in stock). The four-year-old company claims 33 percent of all Internet music sales. That translated to revenues of $17.4 million in 1997, up from $6.3 million in 1996.

Music Boulevard (musicblvd.com), an affiliate of the Cendant members buying club, claims the number one online music spot. In fact, all of the music providers claim to be the biggest or have the most CDs and cassettes to sell. Music Boulevard has a comprehensive network of online music channels like Rocktropolis, Jazz Central Station, and Classical Insites. Music Boulevard is part of N2K, which calls itself the premier online music entertainment company, whose business model combines a 200,000 title online music retail store. N2K reported that their 1998 holiday sales were three times the volume of the previous year, or an increase of 325 percent to approximately $17 million. About half the sales were to existing customers and the rest were from more than half a million new customers. This network is forging ahead with audio samples and has the Internet’s largest database of audio sound samples. Like listening stations in the real music stores, online shoppers will be able to listen to samples of the music before they buy it.

Samples of music, meant to be like the listening stations in the realworld music stores are difficult to produce. The sound must be squeezed through telephone lines and passed from modem to modem and then through the small speakers of the personal computer. Music does not travel this route well. Because the music must be so compressed, it can take a long time and a lot of power to download a brief piece of music. For example, it could take 6.5 megs of memory to store a four minute track.

CD Now and N2K were planning to merge into what they believed would be the biggest music store controlling nearly half the market. CD Now, founded by twenty-nine-year-old twin brothers, Jason and Matthew Olin of Jenkintown, Pennsylvania, grew to a company with sales of $11 million in the third quarter of 1998. N2K had slightly less in sales but was said to be growing faster. Both companies claim a customer base of more than half a million. Each one has raised money in public stock offerings. CD Now has links to Yahoo and Lycos. N2K is on America Online, Netscape, and Excite.

Chasan’s EMusic, based in Santa Monica, California, with an inventory of 132,000 titles from 3,000 labels, has plenty of competition. In 1998 the company formed a partnership with Nordic Entertainment and is applying leading edge technologies in order to create an environment that customers will find informative and fun.

EMusic gives its customers every possible way to find the music they want. The basic music search is the simplest and quickest way to do a directed music search. There are detailed searches that take a little more time but provide a greater depth of search results.

The basic music search allows the user to find music by artist, title, song, label, or style by selecting the desired radio button and inserting the search text in the box. There are also shortcuts. For example, a shopper could enter “vollen” to find the New Age recording artist Andreas Vollenweider. This shortcut can be helpful for those unsure of the spelling. When the results are shown, a click on the name of the artist will bring up a discography with images. A click on the title for the album information page provides in-depth information about the selection. Another click and the selection goes into the shopping basket.

A song search is used to find which CDs, cassettes, and albums contain a certain song. For example, to find all the albums on which Bob Dylan’s song “All Along the Watchtower” appeared, the radio button for song is selected and the name of the song typed in. At the time of writing, the song “All Along the Watchtower” appeared on twenty-four different CDs.

The label search provides the user with a way of looking up the catalogs of his or her favorite labels. In many cases, results contain more than one label bearing the same name. This can mean that the label has subsidiary labels or is distributed through various distributors.

Style search covers all kinds of music, from opera to acid jazz to zydeco and everything in between. Once the style radio button is clicked and entered, the listener can sort results by artist or sales rating.

Mega search is used to find an artist who is also a performer or has a track on another album. For example, a mega search for Jimi Hendrix will show that he also has a track on the Apollo 13 soundtrack. Also, the Extended Search can be used to narrow in on a certain selection by entering criteria in the artist, title, label, and/or format fields.

Classical search is specifically designed to find, for example, that one specific Mozart CD among the over 1,900 Mozart CD’s carried by EMusic. This is accomplished by entering multiple fields that form the basis for a single search. Let’s say someone wanted to find Beethoven’s Fifth conducted by Leonard Bernstein and played by the New York Philharmonic Orchestra and recorded on the Sony label. They would enter “Beethoven” as the composer, “Bernstein” as the conductor, “New York” as the orchestra, “5” as the title, and Sony as the label. This will help narrow the results and locate the desired classical music selection.

The site also offers Hot Sellers, New Releases, Essential Collections, Hot Deals-On Sale, and Bargain Basement sections to help locate music. Hot sellers are displayed based upon the number of sales they generate, not the quality of music necessarily. If a user chooses a style in which to find a hot selling CD, it will be displayed in order of rank in sales. This can also be done through the style search and sorted by sales rating. The New Releases section shows the hottest new releases by style, release date, artist, or sales rating.

Essential Collections is where it gets subjective. Here, EMusic puts collections of music together by style, which they believe best examplifies the genre. Hot Deals-On Sale lets viewers see all items currently on sale in EMusic.

Although there are plenty of great CDs in the Bargain Basement, this section helps those motivated mostly by price to find the CDs they want within their budget.

The album information search provides basic information, including the name of the artist, title, price, release date, sales rating, availability, style, and format. Clicking on the title will take a shopper to the album information page for availability and information about the label, barcode, performers, reviews, references, influences, album graphics, and track listings.

Customers and music business professionals may leave reviews for others to read. These reviews are subject to EMusic’s discretion, however, and the company feels entitled to omit or edit the reviews. Some reviews contained on the site may not have been reviewed or monitored by EMusic.

Customers can open a free EMusic membership without any obligation to buy anything. This membership allows shoppers to enjoy a limited number of sound samples, enter chat groups, place classified ads, enter sweepstakes, write reviews and cool links, and receive buyer coupons. The new customer can open a personal account or simply check in to input personal information. No credit card is needed to become a member, but it is needed, naturally, to buy something at EMusic.

There is a Platinum Membership for those who really love music. Platinum members receive thirty $1 discount coupons, unlimited use of sound samples, a high quality EMusic T-shirt, the EMusic newsletter, frequent buyer points, and much more. A new member would enter billing and shipping address, credit card information, login name, and password. Upon login and acceptance of the password and information, the account is open. A click on “Edit Account” allows necessary revisions. Once an account is opened, members need only to log in with their password on future visits.

EMusic customers get an electronic invoice via e-mail with the details of their order. They then select a shipping option and enter a greeting or a discount coupon number. Once the invoice is reviewed for accuracy, the member enters a password and clicks on “Accept and Send My Order.”

An automatic e-mail notifies customers whether the order shipped complete, is back ordered (in full or partially), or if there was a problem with shipping (i.e., credit card denied). Orders are generally uploaded to the fulfillment center on the business day following entry of the order. Orders are picked and packed as soon as possible and credit cards are charged at the time of shipment. With their large inventory, EMusic is generally able to completely fill about 85 percent of the orders, but sometimes items are out of stock. The availability ratings are not guarantees that a selection is in stock, but rather an indication of the likelihood.

E-music cannot guarantee to ship an order complete. Two options are currently available. The first option is to immediately ship what they have in stock and cancel all out-of-stock items, and the second option is to hold the order for up to fifteen days to allow remaining items an opportunity to be restocked. They are working on a third option, which will allow customers to automatically put out-of-stock items on back order.

EMusic will provide a replacement if an order is defective or shipped wrong. Any returns for subjective reasons must be accompanied with a RMA (Return Merchandise Authorization) number and are generally subject to a restocking fee of $2.50 per item.

EMusic currently accepts online orders only with a credit card, but they are looking into other alternatives for e-commerce. They only accept orders online.

* Source The Best Internet Businesses You Can Start
              Lessons from success stories of both
              small and large internet businesses

 

WEB CHANNELS
  • Basic Internet  New!
         Doing business on the Web
  • Design
         Defining your needs
  • Development
         Building your Web site
  • E-Commerce
         Selling your products
  • Marketing
         Establishing customers
  • Profiles
         Learn from successful sites
  • Technologies
         Understanding the Internet
  • Traffic
         Mastering Search Engines
  • BusinessTown
         Return to home page

  • Copyright ©2001-2003 BusinessTown.com, LLC.     Disclaimer
    Contact us for technical support or provide us feedback.
    BusinessTown.com LLC - Privacy Statement

    BusinessTown.com is a registered trademark of BusinessTown.com, LLC.