Comprehensive Report on TSIG - Part III : Can TSIG Deliver?
Recently many individuals have raised doubts about TSIG's validity. Specifically many former dealers have come to this thread claiming that CCI was a fraud and TSIG will not deliver because CCI did not deliver cds. I've since had contacts with the leader of that group: Mr. George Rogu (aka: Gicone).
Here is my first report on the former dealers:
Message 5344031
So far, I have not received the dealers' agreement and the documentations on the other dealers. So my report is still up-to-date.
Now, I don't think that it has been stressed strong enough that the former CCI will not be involved in the area of fulfillment. In fact, TSIG's ability to deliver cds are almost self-evident and irrefutable.
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Press Release 6/16/98
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Copyright 1998 PR Newswire Association, Inc.
PR Newswire
June 16, 1998, TuesdayJune 17, 1998,
SECTION: Financial News
DISTRIBUTION: TO BUSINESS AND TECHNOLOGY EDITORS
LENGTH: 629 words
HEADLINE: TeleServices International Group Inc. Enters Three Agreements to Enhance its Compact Connection, Inc. Music Commerce Website;
- Consumers Guaranteed 24- to 48-hr Shipment of Music Among Other Benefits -
DATELINE: ST. PETERSBURG, Fla., June 16
BODY:
TeleServices International Group Inc. (OTC Bulletin Board: TSIG), a fully integrated provider for outsourced teleservices, announced today that it has chosen Valley Media, Inc. as its Internet and Direct-to-Consumer Fulfillment Supplier for its music commerce subsidiary, Compact Connection, Inc. (CCI). TSIG has also entered into License Agreements with MUZE, Inc. and ENSO Audio Imaging, Inc. for use of their respective music databases to build content and marketing applications into CCI's music website.
Valley Media, Inc.'s "Sound Delivery" division is one of the largest direct-to-consumer fulfillment houses in the United States for CDs, cassettes, DVDs and videos. The two-year General Agreement with Sound Delivery provides Internet and Direct-to-Consumer fulfillment services to Compact Connection, Inc. that include guaranteed shipping of products within twenty-four to forty-eight hours of being ordered and virtually hourly updates of available inventory. Valley Media maintains a music inventory in excess of 250,000 titles.
TSIG has signed a one-year License Agreement with Muze, Inc. to use its "Muze for Music" database and its "Encyclopedia of Popular Music" for consumer content and marketing purposes. Muze for Music is one of the most complete and comprehensive graphical music databases available in today's market. The newly introduced Encyclopedia of Popular Music offers in-depth artist/label biography information and is one of a kind.
TSIG's one-year License Agreement with ENSO Audio Imaging will allow the CCI website to showcase audio music samples. ENSO's database includes continuous digitizing of new releases, as well as a multitude of digitized catalog titles. ENSO's database of audio samples supports the RealAudio Release 3.0 format.
"The new management team is diligently working on the design and functionality of the Compact Connection website and its seamless integration with the TSIG call center, both scheduled to be launched within the next thirty days," said Robert Gordon, Chairman and CEO of TSIG. "The decision is indicative of our desire to provide consumers with a cutting edge, user-friendly website, a professional customer service center, and the assurance of immediate product delivery."
CCI is well-positioned within the $35 billion global music market and the $71 million global online music market that includes N2K (Nasdaq: NTKI), CDnow (Nasdaq: CDNW) and K-Tel (Nasdaq: KTEL). CCI is the only direct music marketer in the world that can offer a combination of:
-- The lowest prices (including shipping and handling) to consumers on all
CDs/cassettes, including new releases;
-- 24 hour, seven day a week ordering capability, either via the Internet
or through CCI's toll-free 800 number, and;
-- Proven, turn-key, private-label music card
opportunities for its marketing partners.
CCI's state-of-the-art website is currently under construction. CCI's new
online commerce site will be positioned on a high-speed server capable of
accommodating millions of customers who will have easy, direct access to the
world's best music prices. In addition, CCI's World Wide Website will have
advanced web technology for searching, ordering and reordering and will
feature the latest in "push" technology.
TeleServices International Group Inc. is a fully integrated global
provider of outsourced teleservices to companies who are in the business of
selling products and services through toll-free numbers and the Internet.
Visit TeleServices International Group's website at www.stockprofiles.com/tsig
or e-mail TSIG at cciSOURCE TeleServices International Group Inc.
CONTACT: Andrew Schamisso of VistaQuest Financial Public Relations, 212-551-7874, for TeleServices
LANGUAGE: ENGLISHENGLISH
LOAD-DATE: June 17, 1998
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As you can see, Valley Media is going to be the fulfillment company for TSIG. They claim to have in excess of 250,000 titles in stock and 24-48 guaranteed delivery.
So when you go to www.compactconnections.com ,the vast database which you can search through is provided by MUZE, the realaudio samples are provided by ENZO Audio Imaging. These two companies are top-notch veterans of that business. I won't need to elaborate here. I'll let you go the the site and decide for yourself.
But, who is Valley Media. Isn't true that the entire credibility of TSIG on the issue of delivery rest on the shoulder of this company. How do we know it's legitimate and can back up their claims. Well, here's a few articles written about Valley Media, Inc
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Article #1
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Copyright 1998 Billboard Publications, Inc.
Billboard
MAY 02, 1998
LENGTH: 895 words
HEADLINE: Valley Media Quietly Becomes The Web's Top Fulfillment House
BYLINE: BY DOUG REECE
BODY:
LOS ANGELES: While online retailers have grabbed the lion's share of headlines over the last few years, Valley Media's Sound Delivery arm has stealthily, but steadily, grown in concert, becoming the premier fulfillment house in cyberspace.
In fact, with a client roster that includes CDnow, Music Boulevard, Blockbuster, Camelot, E Music, and Best Buy, Sound Delivery is currently the Internet's de facto one-stop.
How Valley has ended up in its place of dominance, say clients, is a tale of service, catalog depth, adaptability, and--more than anything else--foresight.
"Valley just got out ahead of everybody else and got better and better," says N2K Inc. president/COO Jim Coane. "Now they're kind of the Switzerland of fulfillment for Internet retail."
Despite speculation about how profitable online business will ultimately be, Valley Media senior VP of sales and marketing Ken Alterwitz says the company is very optimistic.
"We realized early on that [online retail] was going to provide a huge opportunity," Alterwitz says. "About three years ago, we started building the system and infrastructure to support this side of the business. And we got in just under the wire. By the time we had installed the latest version of our software and put additional material and handling equipment into place, the business just blew up. We went from 2,000 orders a week to 45,000 units a week, which was our peak at Christmas."
Sound Delivery's average weekly order for the early part of this year exceeded 30,000 units.
The future, Alterwitz says, is bright. Online music sales totaled $30 million to $35 million last year, and they're projected to grow 224% this year.
"I would suspect if the current trend continues--and I'm speaking specifically to the audio side--it's not inconceivable that within three to four years this will be larger than our wholesale business," Alterwitz says.
That's an impressive prediction, considering Sound Delivery grew out of a modest direct-to-consumer toll-free number intended to help fulfill special programs by labels and retailers.
"They had a very small drop-ship business they used to support certain customers with special phone orders," says Jason Olim, president/CEO of CDnow, which was Valley's first online retail client. "It was very limited--nothing sexy or extraordinary--but quite good for what it was."
However, companies getting entrenched in online retail are also involved in a new set of controversies.
For instance, Sound Delivery has found itself wading deeper into global waters. Although record companies are concerned with fulfillment houses shipping overseas, Alterwitz defends the practice. He notes that exchange rates and the limited number of orders make it a relatively small issue.
"The big six are writing this policy that would make albums for sale [online] only in the U.S., and I think it's very shortsighted for them to concern themselves with these onesies and twosies," says Alterwitz. "To be honest, the bulk of product going overseas is stuff not available in the country it's being ordered in.
"We're not selling U2 to Australia," he adds. "It's the deep, hard-to-find catalog. Nobody is going to screw up the international marketplace by shipping one piece of the Dire Straits catalog to Malaysia."
While most agree that Sound Delivery had done a commendable job in helping pioneer online music retailing, a simple lack of competition has given it fertile ground to grow roots.
The largest potential threat to Valley, the Alliance One Stop Group, has been too busy sorting out its financial troubles to make an effective push into the online arena. However, Alliance VP of new business development Rob Lensman says the company is on the verge of a major turnaround.
"It's not a surprise to anyone that Alliance has taken its financial punches, but the bout is about to change in a positive manner," says Lensman. "We will be coming out of Chapter 11.
"Up until this point, we've been developing the process necessary to get this business in order," he adds. "That's all been conducted and done, and now we're ready to turn the switch on."
In addition to a recent announcement that Alliance would be providing fulfillment for the highly trafficked Ultimate Band List site (www.ubl.com), Lensman hints that the company will soon be fulfilling Internet orders for a significant traditional retailer.
Its trump cards, he says, are ownership of the All Music Guide--a vast music encyclopedia that includes reviews, discographies, CD artwork, and other items commonly found at online retail sites--and what Alliance calls "real-time order processing."
With that system, consumers are instantly informed whether an online purchase is in stock or needs to be back-ordered.
Meanwhile, some companies--such as Amazon.com, which recently began to sell music online--are considering handling fulfillment themselves.
Regarding Valley's more distant future, executives from the aggressive one-stop met more than two years ago to consider where the company would fit in a digital-download world.
"That's looking far down the road," says Alterwitz. "But it figures there would be an opportunity for someone like us already involved in indie distribution to act as an aggregator, offering to store product in digital form and download to consumers on their behalf."
LANGUAGE: ENGLISH
LOAD-DATE: April 28, 1998
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Article #2
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Copyright 1998 Billboard Publications, Inc.
Billboard
AUGUST 08, 1998
SECTION: RETAIL TRACK: Majors Debate Whether To Go Direct With Net Retailers
LENGTH: 806 words
BYLINE: BY ED CHRISTMAN
BODY:
Online music retailing continues to gather steam as more bricks-and-mortar merchants launch World Wide Web sites, intensifying competition. But even without the influx of music specialty chains to the already-crowded online market, Internet-only merchants continue to make retailing on the Web a high-stakes game.
Take, for example, Amazon.com, which opened for music business June 11. Every day on its home page Amazon.com offers a different title with a 40% discount. On July 20, the featured album was Semisonic's "Feeling Strangely Fine" on MCA. That $16.98 title was offered to consumers for $10.18. In addition to that sale offer, Amazon offers its top 100 sellers for 30% off.
Some of Amazon's competitors are a little miffed and called Retail Track to complain that the retailer's strategy violates the majors' minimum-advertised-price (MAP) policies.
Actually, it doesn't.
That's because Amazon doesn't buy directly from the majors and instead has to rely on a subdistributor as its main supplier, which, according to sources, is Valley Media. Since Amazon buys from Valley and not the majors, it is not subject to their MAP policies.
(To the best of my knowledge, Amazon is the only online merchant that has tried to get "open," or open a direct account, with the majors. CDnow and N2K have yet to try, sources say.)
The reason Amazon is buying from Valley despite its best efforts to get open with the majors is that at this point in time, most music manufacturers are reluctant to sell directly to online merchants.
Five of the six majors say they are wrestling with the notion of opening direct accounts with online merchants. The sixth says that it has yet to give the issue any thought one way or another and has yet to process Amazon's credit application.
For those who are debating the issue, their reluctance appears to stem from two issues. First, the majors have long been hellbent on protecting the geographic integrity of the copyrights they hold. In other words, just as they cracked down on U.S. one-stops shipping albums overseas, now they appear intent on stopping online merchants from selling product across borders. Over the last year, most, if not all, of the majors have extended their export policies to include online merchants.
One way to resolve the selling-overseas issue could be by not opening the online merchants as direct accounts. In order to get open, the online merchants may have to find some way to placate the majors on the overseas issue. Let's suppose one way would be to build a warehouse in Europe--CDnow just announced plans to do so. Another way might be to sign an agreement saying that its ability to buy directly from a major is contingent on the online merchant refraining from selling product overseas. But once the overseas issue is resolved, the second issue that has to be addressed by the majors is what constitutes advertising on the Internet. That's important in order to determine if the online merchants are abiding by MAP policies.
So in the case of Amazon, does the daily 40% discount constitute advertising? In my opinion, it would be an advertisement, and in this case a MAP violation, because it is on the home page of the Web site. That's kind of like hanging a "40% discount" sign for the Semisonic album in a store window. The same goes for Amazon's 30% off the top 100 titles. Not only does that offer come across like a sign in the window of a store; it also feels like a hit-wall advertisement. So if the 30% off brought a title under the MAP, it would constitute a violation, under my interpretation. On the other hand, if an Amazon customer does an artist search for, say, Jimmy Page & Robert Plant, resulting in a price for the duo's "Walking Into Clarksdale" album being displayed on the screen, that to me seems like a bin price and therefore not an advertisement. However, some might argue that if a customer obtained a price from a Web site run by a music specialty merchant and then, instead of buying the album online, bought it at that chain's store, the price would have been functioning as an advertisement.
Another issue that needs to be resolved is how to factor shipping and handling charges into the online advertising mix. In my opinion, if shipping and handling charges brought the Semisonic title to $13.18, it would still be a violation of MAP. That's because the 40% discount results in a $10.18 price. Clearly, Amazon is using that price as an advertisement to lure the consumer into making a purchase. So in my interpretation it would constitute a map violation. But let's not forget that all this speculation is only my interpretation and that these issues are still under discussion by the majors. As for what executives at Amazon think in regard to the above issues, they didn't return calls seeking comment.
LANGUAGE: ENGLISH
LOAD-DATE: July 28, 1998
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Article #3
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Copyright 1998 McClatchy Newspapers, Inc.
Sacramento Bee
July 8, 1998, METRO FINAL
SECTION: BUSINESS; Pg. C3
LENGTH: 129 words
HEADLINE: VIDEO OUTLETS TO CLOSE
BYLINE: Bee business staff
BODY:
Valley Media Inc. said it will close five video sales offices in the East in cost-cutting and corporate streamlining moves.
The giant Woodland-based prerecorded music and video distributor will close sales branches in Cleveland; Buffalo; Bristol, Pa.; Landover, Md.; and Louisville, Ky.
Customers will be served by sales offices in Woodland, Pittsburgh, Boston or Jersey City, N.J.
The company also named Bradley Squires to the newly created job of director of national accounts, video rental. It also promoted Michael Fallone to vice president of marketing. He will be responsible for managing staffs in Woodland and Jersey City as well as corporate-wide marketing programs.
Valley Media has combined music and video sales of annual sales of $583 million.
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Well, I actually had about over 150 articles and numbers of official business reports. But I figured if you can't be convince by these three articles, I'm never going to succeed.
A client list of that consist of Amazon.com, CDnow, Music Boulevard, Blockbuster, Camelot, E Music, and Best Buy; annual sale of 583 million dollars - if that doesn't do it, nothing will.
So will TSIG deliver music? Are all the customers going to be stuck with Musiccards and not get their cds until three months later or not at all. You be the judge.
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