MP3's Company

The hottest digital audio format -- and Web site -- on the Net is changing the way local bands view the future.

Like a lot of guys who spend their lives toiling away in the oft-thankless world of unsigned local bands, Chuck Tinsley is looking forward to the day when music will make him rich -- or at least provide him with a comfortable income. But as a guitarist in the Denver bluegrass outfit High Plains Tradition, Tinsley isn't holding his breath for a major record deal to make this dream a reality. Bluegrass is a niche market at best, he says, and even if he signed to a record label, major or otherwise, it would yield only a meager living for him and his bandmates. Tinsley thinks he's better off keeping his day job as an environmental engineer and leaving his music relegated to part-time status.

So how's he going to make this fortune? The same way everyone else gets rich these days: the Web. More specifically, through the MP3 digital audio format, which promises to rewrite the rules of the music business by allowing bands to reclaim power -- and profits -- from music-industry honchos by delivering their product directly to fans. One Web site in particular, www.MP3.com, has established itself as the leader in the music biz's newer, flatter paradigm. Currently, it hosts 18,000 artists and offers 100,000 songs that visitors can download for free.

When bands like High Plains Tradition sign up with MP3.com, they can upload MP3 versions of their songs to the site. Fans who discover them can download the near-CD-quality songs to their computer -- or to a portable, Walkman-like MP3 listening device -- and enjoy. Listeners can then order more comprehensive and longer works from the band -- EPs, CDs -- directly off of the site. The Web site splits the profits of the sale evenly with the band, an unheard-of equity arrangement in traditional label-artist relationships. Sounds great -- until Tinsley says that since February, his band has probably sold only fifteen or twenty CDs via MP3.com.

The new traditionalists: Bluegrass band High Plains Tradition.
The new traditionalists: Bluegrass band High Plains Tradition.
Can you digit?: The Web suits Zeut.
Can you digit?: The Web suits Zeut.

Tinsley may get rich yet, however -- but not off sales of his own CD. When MP3.com held an initial public offering last month, the $7 billion it raised left even those jaded by this go-go Internet-fueled economy with a ringing in their ears. And MP3.com offered the bands that had been on their site for three months prior to the IPO the chance to get in on the ground floor. The company reserved stock for the bands and allowed them to buy in at $28 per share, the opening price. The stock immediately quadrupled before easing down to less astronomical figures. Today, after a slowing of last month's initial boom, the company is worth approximately $2 billion.

"I made more money off of that site in one day than I will being in a bluegrass band for six years," says Tinsley. He demurs when asked how aggressive his stock position is in the company. But while he says he clearly didn't become an overnight billionaire like MP3.com's founder, Michael Robertson, he's also not complaining. "We look at the CD sales as gravy," Tinsley says. (Representatives of MP3.com, which is still in a quiet period after the IPO, declined to comment for this article.)

John Hedtke, the Seattle-based author of MP3 and the Digital Music Revolution, says it's easy to account for MP3.com's success among the many similar Web sites. "They're far and away the biggest. They have the best domain name you can have. It simply has more of everything -- a lot of news, a lot of editorials and opinions, and boatloads of MP3 files that are, number one, legal, number two, well-indexed, and number three, well-described."

But it's really MP3.com's promise of exposure -- if not necessarily huge record sales or stock options -- that attracts local artists to it, and those toiling in the Denver music scene are among those flocking to the wonder of the Web site. Denver-based rap, country, metal, Christian, rock and pop artists are all represented on the site. For music fans who can't bear trudging out to smoky clubs to catch local acts, it's a blessing. For the bands themselves, it allows them to beat the system.

For example, Arvada's Dan Treanor, a 52-year-old roots rocker who performs under the names Arc Light and Mr. Downtime, says that MP3 has given him worldwide exposure and global marketing power. "From an independent point of view, it's a good tool. Big companies want to have total control over who is being distributed and who isn't. MP3.com takes that control out of their hands."

Treanor is amazed at MP3's broad appeal. "I'm selling in Europe and South America. Where else would they get a chance to hear my music?" After recently doing several shows in Holland and Belgium, he found a Web presence was essential. "In Europe, everyone wanted to know, 'Where's your Web page?'"

Robert Eldridge, lead guitarist of Zeut, agrees. "It leaves out the middle man. It's making record companies scared because they can't get a piece." His band has been on MP3.com for about four months. In July, he says, the band had 968 views of its MP3.com page and 338 downloads of its songs. "We're amazed people are downloading the music and they've never even heard of the band," he says.

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