Friday, September 02, 2005

Bobby & Muze

From Internet Retailer:

Information, Please

With a new owner and some new money, Muze looks for ways to branch out
By Linda Punch

Muze is one of those brands that almost all consumers have used but most have never heard of. Anyone who`s researched a book at or listened to a sound clip of a recently released CD at Tower Records--or engaged in similar activities at any number of other retail web sites and stores--has used its service.
Muze had a modest start nearly 20 years ago as a commercially sponsored syndicated radio feature that answered listeners` questions about compact discs. From that beginning, it has expanded into an entertainment information powerhouse that offers a wide range of content not only about CDs, but also about books, videos, DVDs and games. And it can be found in stores and on web sites of almost every major retailer of those media.

Expansion money
With that kind of established market position, some companies might be content with the status quo. But with an infusion of capital from new owner Enterprise Partners Venture Capital and under the leadership of new CEO Bill Stensrud, Muze is poised to break into another new media segment--providing information on digital content.
Stensrud, also board chairman at Muze, replaced cofounder and former CEO Paul Zullo on July 1, when Zullo stepped down as chief executive for undisclosed reasons. Stensrud was managing director of Enterprise Partners, which in May acquired Muze for $30 million.

As is often the case with successful ventures, the experience of an individual planted the seed from which Muze grew. In Muze`s case, the inspiration arose from Zullo`s frustration with not being able to find information on new CD releases in the 1980s, when compact discs first came on the scene.

At the time, CD releases were sporadic because there were only two manufacturers of compact discs. There was no way of knowing which artists had CDs coming out, when the CDs would appear in stores, or whether the CD was a new release or a reissue of a previously released album or tape. "I`d become a fan of the compact disc," Zullo recounted before he departed Muze. "But when I went shopping, I couldn`t get accurate information on what was in the distribution pipeline."

Even Zullo`s friends in the music industry--he produced a syndicated radio concert program at the time and so had contacts in the industry-- couldn`t give him any information. "I would call my friends at Warner Brothers and ask if, say, the Van Morrison CD is in print and they would say nobody keeps track of that," he says.

Convinced he wasn`t the only one looking for such information, Zullo in 1986 found financial backers, began developing a database and launched Muze`s predecessor, a radio service called Digital Radio Network. Zullo describes one of the network`s products--the CD Hotline, a syndicated call-in program for radio listeners--as an early Internet-style application--without the Internet and without a consumer interface. "Instead of typing their requests, listeners talked to an operator who did the typing," he says.

The move to kiosks
Muze`s service became more sophisticated as new technologies emerged. In 1989, the company began installing free-standing, consumer-activated computer kiosks in record stores, financed in part by the Grateful Dead`s Bob Weir. Later, the company added information on videos, books, DVDs and games.

In the mid-1990s, Muze began setting up Internet access to its database via the in-store kiosks and online retailers` web sites. Today, Muze kiosks are in more than 1,500 stores representing almost every major U.S. retailer of music, books, videos and games. Customers include Virgin Megastores; Trans World Entertainment, which operates FYE, Coconuts Music and Movies, Wherehouse Music and other brands; Barnes & Noble; Borders and Hastings
Entertainment Inc.

The company also provides content to 250 online retailers of music, books and videos, including Yahoo, America Online, Tower Records, Best Buy and Real Networks. It recently added, seller of used, rare and out of print books.

Muze compiles its database by aggregating information from hundreds of major distributors-- including record labels and publishers--in each media category. In the popular music category, Muze has information on 440,000 albums representing 85,000 artists and performers, with more than 3,000 titles added monthly. Its book category is divided into MuzeBooks In-Print (1.9 million titles) and Muze Out-of-Print (3.6 million titles). Its database also carries information on 156,000 videos and 65,000 DVD releases.

What Muze adds to the mix is meta-data--the songs on an album, the type of music or book, critics` reviews, and other information. Its editors read, watch or listen to the top releases in each category--about 20% of the titles--and then write descriptions. They also gather reviews and other information from newspapers, magazines, and other sources.

Something for the small guys
Customers can search for information using multiple keywords. For example, a music buyer could track down an album by title, song, artist, or a keyword in the song.

Muze also has a service called Muze Tunes, which offers 30-second audio clips from millions of songs, available online and in some stores. Muze recently took the service one step further with an experimental marketing program in which music store customers can preview an entire CD for a month prior to its release in stores.

Muze also offers a service to eBay members in which sellers can type in a uniform pricing code number for a book, CD or video and Muze will provide a photo of the cover and the meta-data describing the product, making sophisticated product information available to even the smallest sellers. "It saves the seller from having to come up with a description and scan a cover in," Zullo says.

Muze`s closest competitor is AMG--the All Music Guide--which provides information on CDs, books, videos, DVDs and games directly to consumers as well as to retailers. Muze provides content solely to retailers.

AMG has data on 838,595 albums, 281,092 films, and 75,143 DVDs. Its customers include Barnes & Noble, Best Buy, Ticketmaster, MusicMatch, Amazon, and Napster.

The value that Muze can bring to a retailer can be seen in the experience of, which says it has benefited from being able to provide more detailed information to customers. "We`ve already seen a great increase in sales," says Kevin Donaldson, director of sales and marketing.

In the past, customers came to Biblio when they had a specific book in mind, Donaldson says. "Now, people can come to our site and they can shop, browse, do what they do on Amazon," he says. "We`re becoming more of a shopping experience and less of a pure research type of service."

Access to the Muze database also provides a foundation if Biblio decides to sell music or media, Donaldson says. "If we want to branch out, that door is open to us," he says.

Donaldson says he is not concerned that Muze provides the same information to Biblio`s competitors. "The more information that`s available to customers, the better," he says. "I wish all of our competitors offered something like this. That would keep people more informed."

Not all of Muze`s products have proven as valuable to retailers as its core information services. Such is the case with last year`s attempt at providing an e-commerce platform and fulfillment service--the Mind, Body, Spirit web site--to health clubs and health-care related entities.

Under that program, Muze created a storefront indistinguishable from the retailer`s own site and stocked it with book, music, and video titles with health and wellness themes. Products shipped to customers carried the name of the retailer.

But Stensrud says the product was too narrowly focused. "We had a small number of customers and virtually no revenue," he says. Although Muze shut down the operation, the company expects to launch other, broader-based e-commerce initiatives that will provide software and services to enhance e-retailers` sites, he says.

Further evolution
Despite the setback with the Mind, Body, Spirit site, Muze continues to evolve as new entertainment forms, such as digital content, emerge. Transforming Muze into a company that will thrive in the digital age is a top priority, says Stensrud. "We`re moving from a world of physical content to a world of digital content, and that implies that companies like Muze have to make a significant investment in technology to track that transformation," Stensrud says.

Muze`s goal is to provide the same type of meta-data on digital content as it does on CDs, books, videos, DVDs and games. "The industry needs the same set of data and cataloging services for digital media as it has for physical media," he says. The challenge, however, is that digital content doesn`t carry the same information that physical content does--such as liner notes, readily viewable playing times and track lists--and so Muze will have to establish not only new categories of what it will report but also new ways of gathering that information.

Stensrud foresees the day when Muze will provide to retailers information on content, such as ring tones, computer wallpaper, and television programs. While Muze hasn`t defined exactly what that information will look like, it believes it needs to move with the market as portable devices become more popular. "These are all things that will become part of the greater assembly of media in the future," Stensrud says. Customers for such information could include companies that provide games and content for mobile devices--such as JAMDAT Mobile Inc., a provider of wireless entertainment content, as well as mobile carriers such as Verizon Communications Inc.

One major change needed to bring Muze into the digital age is for it to capture data electronically. "Right now, most data are taken from physical media and keyed in by an experienced editor," Stensrud says. "Over time, we will move toward taking data in a digital format and allow the editors to spend their time editing (content) and adding value."
Muze also will be investing in the technology by which it delivers its product, Stensrud says. "We`re going to move from essentially a publisher of information to being an online resource for information in a wide variety of formats," he says.

More convenience
Currently, customers download content from Muze in one large file. But many retailers are asking Muze to host the content on its own site. "Our customers have said it would be more convenient if we hosted that data online and gave them access to the pieces of it that they need, when they need it," he says.
Stensrud sees many opportunities ahead for Muze. "Our retail customers have very common problems and they all have staffing constraints," he says. "If we can take our basic product and build new services on top of that, and enable our customers to deliver better services with lower investment, there`s a win for everybody."


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