GoodNoise changes tune to EMusic

Pioneering online-music seller GoodNoise Corp. officially changed its name to EMusic.com and began trading on the American Nasdaq exchange Wednesday as part of an effort to broaden the scope of its business.

The move comes as digital, downloadable music -- and in particular, the MP3 format -- is gaining increased attention from record labels and major technology companies.

EMusic.com CEO Gene Hoffman said the company's old name was associated with an independent-rock focus, but that the audience for online music has broadened to include jazz, country and other genres. "This allows us to raise our profile, and expand considerably," Hoffman said. "We can offer more music outside of the obvious customer base. We were a well-known brand before, but when people hear 'EMusic' they absolutely know what we do."

The company begins trading on Nasdaq under the EMUS ticker Wednesday; it formerly traded on the OTC Bulletin Board, which offers less stock liquidity. At the same time, EMusic.com unveiled a new Web site design; appointed to its board Eddie Rosenblatt, former head of Geffen Records; and announced a license agreement with King Biscuit Entertainment Group Inc., adding 60 albums to its inventory.

Bolstered by technological advances and growing consumer demand, online music has recently grown significant enough to draw major investments from the largest Internet companies. America Online Inc., for example, Tuesday acquired Spinner Networks Inc. and Nullsoft Inc., which produce software and services for downloadable music and Internet radio.

RealNetworks Inc. also gave downloadable music a boost recently with its RealJukebox player application; the software's release followed shortly after RealNetworks' acquisition of MP3 developer Xing Technology Inc. Most major record labels have also announced plans for selling downloadable tunes. "We see announcements like this basically confirming that this is going to be a significant market moving forward," Hoffman said. "There's the interest, and the customers are there; it's basically just a matter of market adoption."

EMusic offers music in the MP3 format, which has grown popular on the desktop, with applications such as RealJukebox, and player devices such as Diamond Multimedia's Rio. Unlike competitors such as MP3.com, which distributes free, promotional music, EMusic sells its licensed content -- 99 cents for a single, $8.99 (£5.50) for an album. The company plans to expand into such genres as jazz, classical, hip-hop, country and electronica, and is readying a major marketing push to promote its new brand and to educate consumers about downloadable music, Hoffman said. "The MP3 news to date has led people to believe it's this pirate thing," he said. "Our message now is, it's not only compelling, attractive, and available at a good price, but you can also get it in a commercial way that's easy, safe and clean."

He said EMusic is also looking to partner with an online radio "network," such as AOL's Spinner.com or MTV's Imagine Radio, as a way of turning users on to music they can acquire over the Internet. But EMusic's biggest challenge might come from traditional record companies, which are developing their own, proprietary systems -- several of them -- for securely distributing music online. Will upstarts like EMusic get cut out of the loop?

Hoffman believes that, in the end, it will be in the record companies' interests to come around to an open standard such as MP3. "It's an interesting problem," he said. "You've got 15-20 million people using MP3 now on a day to day basis, and that'd the early adopter base for downloadable music. What I wonder is, where are these proprietary standards going to get their early adopters from? I see [MP3 users] as the early-adopter base for any downloadable music format."

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