Andreas, check this out...
AOL, BMG invest in Internet music site Riffage.com
December 15, 1999 11:46am
Source: Reuters
LOS ANGELES (Reuters) - Riffage.com, a Web site showcasing unsigned
bands, Wednesday said it had won $21 million in financing, including funds from
Internet access provider America Online Inc. and from BMG, a record label owned
by German media giant Bertelsmann AG .
Bertelsmann's investment arm, Bertelsmann Ventures, and Internet investment
firms Mayfield Fund and Trans Cosmos USA were also contributing funds to
Riffage, which launched in March out of Silicon Valley.
The funds, Riffage's second round of private investment, would be spent on
boosting the site's personalization and filtering features, which Chief Executive
Ken Wirt said were at the heart of its business model.
The deal is another step in America Online's march to be a big player in the
Internet music industry.
Dulles, Va.-based America Online has bought music-related companies such as
Internet radio firm Spinner.com, and Winamp, maker of a popular software for
playing compressed digital music files on a PC.
Wednesday's deal follows a November pact to make content from Riffage
available on AOL's other Web properties.
The investment is also significant because of the involvement of BMG
Entertainment, one of the ``Big Five' record labels that have been leery of sites
like Riffage that some say could change the balance of power in the $40
billion-a-year music industry.
Riffage is one of several companies, which also include MP3.com Inc. , which
post songs by unsigned bands on Internet sites for visitors to download to their
computers for free.
BMG has become more Internet savvy as corporate parent Bertelsmann has
made significant other investements in online companies.
``Initially the music guys were nervous of this, but eventually they came around,'
Wirt said in an interview.
Riffage complemented and did not threaten a music label like BMG because it
offered an outlet to showcase new acts and bands, Wirt said.
``We're not trying to compete head-to-head with the big record labels,' Wirt said.
``Big labels sign more bands in a year than they can support with promotions.'
``We can find a way to hook up a band with an audience that would like them.
That's a valuable service to provide to a band that's unsigned -- or even to one
that's already successful,' Wirt said.
Riffage boasts around 15,000 songs by 10,000 bands on its Web site, which
attracted 695,000 visitors in November, up from 38,000 in August, Wirt said.
``People are finding music they like. If you're not finding music you like, you go
somewhere else. So we view those numbers as a validation of our filtering
process,' he said.
^REUTERS@ |
