Newsbits


Monday November 23, 9:23 pm, Eastern Time

CustomDisc.com to offer in-store, customized CDs

By Matthew Lewis

HARTFORD, Conn., Nov 23 (Reuters) - A small Connecticut technology firm aims to change the way people buy compact discs in the United States, a business worth about $15 billion a year, and the concept goes well beyond retailing music via the Internet.

CustomDisc.com, which recently launched a Web site that allow consumers to compile and buy compact discs tailored to their own specific tastes, is extending its ``customized CD'' concept from cyberspace into retail stores.

The Stamford, Conn.-based company plans to launch its automated, ``compile-your-own CD'' kiosks in music stores across the United States in 1999, the company said on Monday.

Shoppers will be able to walk into a store and use a computerized vending machine to create personalized compact discs with 70 minutes of music. After punching in the desired songs, the customer then submits his or her credit card, and the machine spits out the new CD in less than five minutes.

The cost is $4.99, plus $1 per song on average, though songs and pieces of an unusually long duration might cost more.

``For a 10-song CD, you can expect to pay $13-14,'' Nicholas Darveau-Garneau, president of CustomDisc.com, told Reuters in an interview. It will cost a bit more than buying a regular CD, he said, because ``it's like buying a custom-made, tailored suit, as opposed to an off-the-rack suit.''

The 15-employee CustomDisc.com is owned by the closely held Custom Revolutions Inc.

It recently obtained the exclusive, worldwide licensing rights for customized CD vending machines from Intrepid Enterprises, a Boston-based intellectual property management firm.

CustomDisc.com is now marketing the idea to ``brick and mortar'' music retailers around the United States.

``By next year, we want to have a deal with two large retail customers,'' Darveau-Garneau said.

Record companies generally like the concept because they see it as a way of fighting music pirates, many of whom flourish on the Internet.

``You can currently go on the Internet now and download, for free, almost any song ever made,'' Darveau-Garneau said. ``And the record label does not get paid for that, which is clearly wrong.''

``The way to think about what we do, from a record-label perspective, is... if the consumer really, really wants to buy particular songs, let's get them to pay for it, as opposed to stealing.''

CustomDisc.com to date has licensed more than 185,000 songs from 125 of the 550-plus record labels in the United States, he said.

The company's custom-CD Web store has been doing ``very well'' since its launch just a few months ago, Darveau-Garneau said. ``We're getting literally thousands of people to our (Internet) store every day. This last month, we got over 1.5 million page impressions. Our sales have been doubling every month,'' he said, though he declined to reveal sales figures.

Other companies, including Music maker and Amplified Inc., also offer customized CDs via the Internet.

Currently, about 700 million music CDs are sold in the U.S. each year, Darveau-Garneau said. CDs are a $15 billion annual industry in the U.S., and double that worldwide.

While less than 1 percent of the CD industry now comes from non-traditional sales (including customized discs and traditional CDs sold via the Internet), industry analysts predict that by the year 2002, non-traditional sales will make up 15 percent of the total, and 37 percent by 2007.

``With all these different (channels) to buy music, the music industry is going to grow significantly,'' Darveau-Garneau said. ``The more choice and access you give people to the music goods, the more money you're going to make.''





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W: www.netshift.com

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