July 08, 2004

CD Burn Music Station

CD kiosks let fans do it their way -- and legally

CD kiosks let fans do it their way -- and legally
Adrienne Baker, Star Tribune
July 7, 2004 MIXANDBURN0707

A St. Paul company is jumping into the maelstrom over downloading music with its own way to get customers to pay: stations where they can mix and burn their own custom CDs.

Mix & Burn Inc. has developed a laptop-size, touch-screen kiosk called a "Music Tablet" where consumers can download from a catalog of more than 200,000 songs spread among 200 music genres. The kiosks, which are sold to retailers, will appear in two area stores in coming weeks.

At $10 for the first seven songs and $1 per song after that, it's not as cheap as free, but it is legal. And the service addresses a fundamental problem with how the music industry sells its product: People don't like paying $15 for a 10-song album when they want only two of the tracks.

An album can be created at a Mix & Burn station in about four minutes.
Mix & Burn's Music Tablets
Mix & Burn's Music Tablets
Heather Charles
Star Tribune

The company hopes to expand the concept to digital movies, games and software.

CEO Stephen Russell said he came up with the idea for the Music Tablet after talking to his son about Napster, then an illegal service, and other peer-to-peer networks several years ago. "I thought, 'This is too large an industry to not find a legal way for digital content to be delivered,' " Russell said.

Mix & Burn is hardly the first to try to capitalize on legal music downloads. Apple Computer's iTunes Music Store, for example, sold 70 million songs, at 99 cents each, in its first year. Richfield-based Best Buy Stores Inc. has contracted with two services, Rhapsody and Napster, for downloads and music streaming.

Many of those legal services require users to pay monthly subscription fees on top of download charges, however. Legal downloading also is out of reach for people who don't own a computer or who lack a high-speed Internet connection.

Mix & Burn's Music Tablets will be located in retail outlets, meaning there's no equipment for consumers to buy. And because Mix & Burn has agreements with five major music publishers, songs are available for download as soon as albums are released in the stores.

Still, the question remains whether consumers will be willing to travel to a store in order to pay to download music, as opposed to doing so -- legally or illegally -- from the privacy of their homes.

Matt Wineger, a 20-year-old University of Minnesota student, doubts the product's ability to compete with free music and the convenience of home. "You don't want to be downloading 'It's Raining Men' in a public place," he joked.

But John Flaherty, a 19-year-old University of Minnesota student and Napster user who refers to himself as a "professional pirate," said: "It would be awesome to use it and absolutely convenient. I don't know if it'd be marketable, but it is certainly worth a shot."

For the music industry, any business that persuades customers to pay is a welcome one.

The Recording Industry Association of America describes Internet theft as "rampant." An industry survey released three years ago claimed that 23 percent of music consumers were choosing to download or copy music for free rather than buy it.

About 44 million Americans have downloaded music, said Matt Kleinschmit, director of Ipsos-Insight, an international market research organization. "The rise of digital music has redefined the music industry options for consumers. No longer is there only one way to obtain music," he said.

Though legal kiosk-based music delivery has been discussed since the late 1990s, the concept was slow to be adopted, partly because music companies were skittish about all download services, including legal ones.

Mix & Burn is one of the first companies to develop a kiosk that could be used by all kinds of retailers, and the timing could be right, Kleinschmit said. "We are entering into an era now where consumers are more in tune with terms like 'download,' 'burning' and 'ripping,' " he said. "Now is a perfect time to experiment with these types of systems."

The success of iTunes has persuaded the music industry to grant licenses to other legal download services. In March, Starbucks added kiosk-style listening and burning stations to its menu at some stores, selling albums for $6.99 for five tracks and $1 for each additional song.

Navarre Corp., a New Hope-based publisher and distributor of music and software, recently bought 45 percent of Mix & Burn. "Mix & Burn is a new and unique way for the consumer to access and purchase music through a retail market," Navarre CEO Eric Paulson said. "Our relationships with major record labels and independent labels helped them get licenses," he added.

Mix & Burn's July installment of Music Tablets at the Bound to be Read bookstore in St. Paul will be an opportunity for Minnesotans to sample digital music in stores.

Music Tablets will be available at the Electric Fetus in Minneapolis and at the St. Olaf College bookstore in Northfield beginning this fall.

"We are hoping to get as many teens in here as possible that won't buy anything and just sit and look," joked Lance Festerman, general manager of Bound to be Read.

Music Tablets give the bookstore an opportunity to sell music without having to stock physical inventory, Festerman said. "It's very much a new angle. It's taking an old model from the music industry, turning it around and updating it," he said. "I think it will draw people of all ages. If you can navigate the Web, you can use the product."

As the search for ways to support the music business and combat theft continues, other companies are considering CD burning at retail locations.

Best Buy is closely watching the performance of CD-burning stations. The company has no immediate plans to offer the service, but "it is something that we are looking very seriously at," said Scott Young, vice president of digital entertainment.

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Adrienne Baker is at [email protected]

CD kiosks let fans do it their way -- and legally

Posted by Craig at July 8, 2004 03:00 PM