July 06, 2005

Interview with Music Kiosk Pioneer

Interview with Shervin Rashti of Touch n Surf on the Burn A Song self-service music download burning kiosk. Major distribution agreement hinted at in next few weeks.

Source: KioskCom.com Website

Burning a Revolution in Music

By Rick Redding

You say you want a revolution? Thats what Shervin Rashti believes his Burn A Song kiosk is bringing to the music business. Thats why he and his associates at Los Angeles-based Touch N Surf set out on a path two years ago to build a kiosk for burning CDs, and eventually distributing all sorts of media.

The Burn A Song kiosk finished second at the 2005 KioskCom.com Awards in the category of Best New Deployment, Small Deployment. Rashti, who co-founded Touch N Surf with his father Jacob, believes his patience in dealing with the requirements of record label executives is about to be rewarded.

He said Burn A Song wont qualify as a small deployment long, as he expects to have 100 of the kiosks in place this year, and more than 1,000 in locations such as electronic retailers, grocery stores, universities, malls and convenience stores by the end of 2006.

In a July 5 interview, Rashti said he expects to have a major distribution announcement later this month.

Without doubt, Rashti said the biggest hurdle has been getting agreements from the four major record labels to license musical content. Burn A Song is the first to obtain such an agreement, and he expects to have all of the labels on boards very soon.

It has taken 14 months, he said of his quest to obtain agreements from the four major record labels. Its taken a lot of meetings and stringent requirements. Theyre big on security, and they have to OK your whole business model.

Rashti says that in the near future customers will be able to find and download music from the four major labels Universal Music Group, SONY/BMG Music Entertainment, EMI Group and Warner Music Group on Burn A Song kiosks. Theyll be able to use the kiosks to compile their own CDs. But more importantly, customers will be able to find and purchase out-of-stock recordings through the kiosk.

We saw this vision two years ago, Rashti said. We saw the need and the pain involved in the distribution of music. Retailers cant offer the shelf space, and consumers cant get the solution.

Weve put a major store into a 2 by 2 box. Thats revolutionary, he said.

An industry-leading publication, Billboard, discussed the kiosks role in helping music stores reduce physical inventory. A May 21 story about CD-burning kiosks included this quote from record industry executive Gene Fein. A lot of labels are eliminating low-turning albums from their catalog, and retailers are taking them out of their inventory anyway. We don't think this is going to replace traditional manufacturing, it will complement it.

The Burn A Song kiosk is manufactured by Kiosk Information Systems, which has several clients pushing to be included in an increasingly crowded market.

Theyre the first group to secure major label content, said Tom Weaver, vice president of sales and marketing for the Colorado-based firm. This application is still in its infant stages. The biggest issue is content. Indy labels are available, but the question is would anybody buy it?

In fact, Business Week reported on June 20 that a CD burning station, Hear Media, with a catalog of 150,000 songs available, has been a disappointment for Starbucks. Tested in 45 stores in Austin, Texas and Seattle, the early results show customers aren't buying CDs. Still, the chain told Business Week it would roll out the machines eventually to 30,000 stores.

Weaver said very few similar CD burning deployments have reached the marketplace, though there are many competitors. KIS, in fact, believes digital media downloads, including CD burning, will become a major channel/sector for the kiosk industry.

And while the Burn A Song kiosk is poised to stir a music revolution, Rashti says its only the beginning in terms of product that can be offered on the kiosk. Ring tones, photos, even movies, are part of his vision of the future.

Other things are definitely coming, Rashti said.

Posted by keefner at July 6, 2005 03:39 PM