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To: Elliot who wrote (983)	6/4/1998 10:26:00 AM
From: neverenough	Read Replies (1) \| Respond to of 44908

This was from ISR this morning, on CDNW. Here is one you've got to watch for both the short and long term. This is one of the well known biggies which has taken it in the teeth recently. First on foremost, as we once stated when describing N2K (Nasdaq: NTKI), while the Internet record retailers are facing competition from all points, we believe the pie is growing at an even faster pace--and that it will accelerate as Audio sampling on the internet continues to improve. Industry sources say 70% of consumers believe it is important to listen to the music before they buy it. Online music sales were $49 million last year and Jupiter communications thinks it will be $1 billion in 2002. The retail (record store) industry will become to be known as the first industry which was destroyed by the internet. Count on it. Keep in mind that the record industry is a $35-40 billion dollar industry. So why begin to watch CDnow...now ? Besides from dropping from $39 to $17 1/2 (a $344 million slippage in market value)--besides reporting sales of $2.1 million in 1995, $6.7 million in 1997 and $17.3 million in 1997 and a $10 million first quarter--besides a modest valuation (by internet standards) of 5 times book and 10 times sales--besides the cancelling of a 2.5 million share secondary (where no insiders were selling)--are three of little noticed press releases in the last two weeks.. First two were on May 18th when CDNow announced that it would be become the exclusive retailers for the Music Match and Imagine Radio web sites. Say who ? Music Match has software at their web site which lets you organize music downloaded from the internet and from CD's into a personal jukebox. Imagine Radio has 16 internet radio stations playing a variety of music. Not impressed ? Think of it this way. Let's say, as an analogy, your driving in your car--your listening to one of your favorite songs and you think to yourself--I'm going to buy this CD. But instead of trekking to your local record store, you just hit a button on the dashboard while your listening to it and you buy. Can you imagine. That is what you can now do when you combine these two web sites with CDnow. You listen, you like, you buy. Enough said. We are wildly bullish on anything radio/internet. The third and most important announcement came on June 2nd when CDnow announced it was buying SuperSonicBoom. SSB was the first company to offer customized CD's on the Internet. The only thing we're more bullish on then radio/internet is customized CD's. While it is still early (meaning most record labels are not participating) the fact is who...hasn't bought album after album, cassette after cassette and cd after cd only to find you only like three songs out of 12. It ain't right--and it's going to change. And CDnow has just moved to the forefront. It won't be this year and probably not next, but the day is coming where we will all be able to create our own cd's with twelve of our favorite songs and from 12 of our favorite artists.