MP3 pumps up the volume for local musicians

News Web sites are increasingly hearing a digital siren's call: developing MP3 communities to boost traffic and promote their local music scenes--a niche largely untapped by local radio stations, which have moved slowly to embrace the Web.

This week, for example, Washingtonpost.com unveiled an MP3 service, which it promotes on its main Web site along with breaking national and political news headlines. In doing so, it joins longtime MP3-booster Boston.com and others angling for local Internet ad dollars, which are expected to account for a quarter of all online marketing spending by 2003, according to research by Jupiter Media Metrix.

"This fits in with a long tradition of local media trying to serve the local music scene," said IDC analyst Malcolm Maclachlan. "In radio, programming is set by a bunch of guys sitting around a table somewhere in Texas...Newspapers can be very relevant in developing highly local content for this market."

The trend highlights the enormous popularity of free MP3 downloads and a renewed focus on local Web strategies as Internet media businesses grow increasingly desperate for earnings. With major national players, including Walt Disney, pulling the plugs on their flagship Web sites, newspaper chain owners, such as Cox Enterprises and Gannett, are sticking to long-held strategies of targeting the local markets. Both are experimenting with MP3 download strategies as a way to drive traffic.

Newspapers aren't the only ones to smell an opportunity: MP3.com, a giant promoter of free MP3 downloads, hopes to profit from the trend by providing business-to-business services to radio sites and others hoping to create a buzz around local music. The company has a long-standing, but so far disappointing, relationship with media conglomerate, Cox Enterprises, which was an early investor. MP3.com offers a co-branded template for Cox's online radio subsidiary Cox Radio Interactive.

Whether MP3 communities will offer a quick panacea for Internet media companies' advertising woes remains to be seen, however. The business model for such communities is still unproven, with early experiments failing to produce clear results.

In dipping their toes into the MP3 market, newspapers are also slipping into territory coveted by rival radio networks, such as Cox, which are increasing their online efforts after a period of consolidation that saw many of the industry's biggest players put their Internet plans on hold.

"Radio is way, way behind," said Terry Ash, vice president at MP3.com's radio division. "They're basically posting up photos of their DJs. It's just been recently, in the past year or so, that they've decided to do something."

The first big MP3 community was pioneered by MP3.com, which gave musicians a place to promote their work to a wide audience over the Internet and maybe make it big outside the major record label system. The service hosts digital versions of songs, which listeners can sample, with an option to purchase tapes and CDs. The service has signed up thousands of artists in hundreds of genres, including location.

MP3.com's dominance hasn't put off rivals, who say they believe the glut of music on the site spells opportunity.

"The thing with MP3.com is it's an enormous site," said Washingtonpost.com spokesman, Don Marshall. "Local bands can get lost in the mix."

Among the first sites to test that theory was Boston.com. The Web site, affiliated with the New York Times Publishing Company's, The Boston Globe newspaper, launched its MP3 community about two years ago and has steadily garnered wide acclaim.

Adam Salsman, who co-developed the site, said the company hosts some 500 bands which can upload and store five tunes on the site at a time--a limit designed to save potentially costly storage space. Salsman called the site a success, driving slow but steady daily traffic growth.

"We haven't really promoted the music site," he explained. "Pretty much all of its success has come from word of mouth."

Still, he admitted, it hasn't been a clear home run; recent pullbacks in the New York Times' online publishing efforts have raised some uncertainty about the site's long-term strategy.

Boston.com has attracted considerable attention in the online news business, however, where it has spawned several imitators.

Mike Coleman, audience manager for digital media at The Arizona Republic's Web site, said his Gannet-owned paper modeled its year-old MP3 community site directly on Boston.com. "We blatantly ripped them off," he said.

Like Salsman, Coleman said the paper's local music coverage has become an important part of its strategy for attracting local ad dollars, offering several anecdotes of success without actually breaking out any hard performance results.

"This is a great viral marketing tool," he said. "We recently had a download battle between Haggis and Idle Bind (two prominent local bands) who e-mailed fans to download copies of their songs to stay on the weekly Top 10 charts."

Coleman admitted the programme maintains a distinctly niche audience, however.

"We used to publish the total number of downloads," said Coleman, "but we stopped when we realized there was a huge drop from the top few acts, which can get 1,000 or more downloads, and the bottom, which sometimes get only five or six."

Gannett, which owns USA Today and nearly 100 local and regional papers around the country, is looking at the Phoenix-based paper's experiment as a trial balloon to see if MP3 communities make business sense.

"We're testing to see how much interest there is in the marketplace and whether there is a viable business model," said John Williams, Gannett's vice president of business development.

Taking a slightly different angle is Cox, which owns a chain of radio stations, in addition to newspaper, cable and TV properties.

Gregg Lindall, vice president of Cox Radio Interactive, said the company is tying its online music strategy to its network of offline radio affiliates--an all-in-one approach that included MP3 downloads from local bands.

The company, last week, went live with the last of a series of Web sites; it has brought some 74 local radio stations online since July 2000.

"This market properly belongs to radio," Lindall said. But it's "very early in the game."

In fact, Cox has taken a run at the MP3 business before and stumbled. The company and MP3.com in 1999 launched a joint venture, MP3radio.com, to create a radio Web portal. That business eventually folded.

For its part, MP3.com sees a big opportunity in courting radio stations to provide MP3 communities.

MP3.com's Ash said the company is working with a handful of stations owned by radio powerhouse Clear Channel Communications, including B98 FM out of Atlanta.

"Radio stations are in an excellent position to develop online revenue from their existing ad base," he said, "once they own their audience."

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