New music portal promises to create a secure revenue stream for rights holders

A veteran in the Canadian music industry has teamed with a dot com incubator to bring the record label model online, without creating a new haven for copyright pirates. Montreal-based Donald K Donald (DKD), a high-profile Canadian concert promoter and label owner, and QR Canada Capital Inc, also of Montreal, are tying together a digital record label for unsigned indy talent with old-school management services to provide secure online music. GotAHit.com should hit the web with a demo site this month, with a fully functional offering coming online by July. The web site will also use technology from a third partner, Liquid Audio Inc of Redwood City CA, to encode music for online distribution, and promotion across Liquid Audio's network of 750 affiliated sites. GotAHit is the result of marrying technologies from two QR Canada companies which specialize in hosting corporate ecom sites, and digitally watermarking electronic files, including books, licensed CDs, software and video. QR Canada president Tom Reti says the two areas of expertise enable the company to move into one of the fastest growing areas of Internet usage, digital music. The venture will use Liquid Technology know-how to distribute the music without fear of piracy, and DKD will provide the back office infrastructure including artist promotion and management, as well as cross-over to traditional record label media such as CD. The company hopes to distinguish itself from a mess of music portals and MP3 sites by being a full-service provider to the music community. GotAHit will seek out new talent, sign groups to either the digital, or hard-format record labels, manage artists careers, promote the band and distribute the tunes. "If you look at most MP3 sites," says Reti, "there are no resources which have the industry back office." He adds that joining the fray of companies providing MP3-format music isn't an attractive business plan to begin with. "Nobody needs another MP3 site. Conversely, if I list my business in the Yahoo search engine, what chance is there that I'm going to come in the top 10? Zero. It's the same thing for the artist. If he lists (on an MP3 site) or ArtistDirect.com, who's going to hear him in there? No one." GotAHit will use Liquid Audio's network to route traffic to the site, and Reti says the demo site online now (www.gotahit. com) has already attained 20,000 visitors without any promotion. There is musical bench-depth on the management team through its partnership with DKD, including VP Keith Brown, a past president of Aquarius Records with 30 years of experience in the industry, including having managed Corey Hart's career and several other well-known Canadian artists. Replacing rights revenues with subscription revenuesReti says the revenue model for GotAHit is no different a traditional record label cutting vinyl. "It has long-term valuations based on catalog once the artist's career is over. We would jointly own that. There are international revenues. There are agent revenues - concert revenues. The record label model is your traditional model but what we're trying to do is empower the artist with all the information possible and create the next-generation of record labels which will be entirely digital." The revenue model for labels may not change, but Reti says the implications are huge for the music industry as a whole. The distribution chain can be cut down to size by eliminating pressing plants and music will probably come down in price as a result. Further, Reti envisions subscription-based services becoming more prevalent over the rights-publishing model which has become well-established. "Record companies are going to have to face the fact that, with all this empowerment of the consumer on the Internet, buddy, you might not be selling records the way you used to sell them at HMV anymore." Besides a catalog of 60,000 songs that the company already has rights to, Reti says there are several deals pending over the course of the next few months to significantly beef up that total. In order to attract and potentially sign new talent, GotAHit also plans a summer-long talent hunt.

New music portal promises to create a secure revenue stream for rights holders

News | 05/04/2000 4:00 am EDT

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us