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Microcap & Penny Stocks : CustomTracks Corporation (NASDAQ:CUST) -- Ignore unavailable to you. Want to Upgrade?

To: John S. Baker who wrote (42)	11/16/1998 9:11:00 AM
From: stockvalinvestor	Respond to of 48

Just called and conference call will be at 11am CT. (Noon Eastern Time)

To: John S. Baker who wrote (42)	11/16/1998 1:17:00 PM
From: John S. Baker	Read Replies (2) \| Respond to of 48

Brief, very subjective impression of the conference call.... Success of CUST depends upon several external factors and may take a while, but in the meantime, Mr. Cook is guarding our cash very carefully. The original idea was to do custom CD's, but certain events in the MP3 business have added another possibility. Cook reviewed MP3 situation: permits someone to select cuts off his retail CD, pull them off and encode in near-CD-quality and transmit over the internet, typically by E-mail or in news groups. MP3 players use unprotected (ie, no patents) flash card technology and cost in the $200-400 range. But the five major record companies are losing sales, and the artists are losing royalties. So the RIAA (industry trade group) filed for a temporary restraining order against the MP3 technology, but the judge did not grant it. Now the MP3 piracy can continue, while the RIAA gets set for a trial ... which might take a very long time, with no guarantee of winning. In the meantime, Cook believes that the future lies in the Big Five quickly establishing some universal system which protects music which can be downloaded from a central source. For instance, if each new portable unit ... follow-on to MP3 players ... had a serial number, then the downloaded info could be encrypted to permit it to play only on a player with that serial number. Someone could E-mail it to a friend, but it would not play on that friend's new portable unit. CUST is currently in discussions with the Big Five. In order for Cook to proceed, he feels he needs to have access to a significant library of music, meaning that a deal with 1-2 studios is a non-starter; a deal with 3 studios is iffy; and with 4-5 studios, they would proceed. In the meantime, CUST is lean and mean and hoarding cash (only 10 salaried employees, for instance). What kind of time frames? Once a deal is signed, he anticipates 9-12 months before they might be actually marketing and distributing music ... noted that it's better to plan properly. JSb.