Company Profile: ListenSmart.com
10500 Little Patuxent Pkwy.
Columbia, MD 21044
Sean P. Fenlon - President & CEO
Marc A. Contract - Vice President
Hyun Lee - CTO & System Architect
David Seidl - VP, Strategic Development and General Counsel
In 1998, Sean Fenlon was working towards a Doctorate of Music Arts at the Peabody Institute of Music in Baltimore, Maryland, when he became enamored with the opportunities presented by the emergence of the Internet and related technologies. He was convinced that the Internet was poised to transform how listeners related to music. As an independent artist, he was one of the first to convert his music into MP3 song files and upload them to Web site for people to enjoy. The experience had its pros, but the downside was that the sites to which he and other artists posted their music became large and successful, raising an enormous amount of money in paid advertising in which the artists providing the music had no share. Determined that there was a better way, he sought the help of his friend and partner, Marc Contract. The two spent the next year studying the new music industry, monitoring and participating in the bulletin boards of independent artist sites, and creating a plan for something better for artists – ListenSmart.com.
ListenSmart.com received its first round of financing in the amount of $750,000 from private investors in October, 1999. They are about to receive their first institutional round of financing in July 2000, which will be in excess of $1 million dollars.
ListenSmart.com is an independent music Web site that is dedicated to indie artists, sharing 50% of all advertising revenue with artists who participate in their "revenue sharing" program. The site announced its intention to launch at the New York Music & Internet Expo in New York in March, 2000, and expects to officially launch in July.
"Revenue sharing" artists who provide music to the ListenSmart.com site are given a share in 50% of the advertising revenues received by ListenSmart.com. This concept is one of the things that make ListenSmart.com unique – it appears to be truly devoted to helping its artists and not just profiting from them. While many sites use the music of indie artists to drive traffic to the site, which then attracts advertising dollars, ListenSmart.com is one of the first to actually give the artists a share of that money. Per President and CEO Sean Fenlon, "Most sites are interested in using the artists' content to drive traffic to their site, but prefer to keep the artist at arms length. Our focus is not so much on traffic to our site, but on the inherent entertainment value of the artists' music. Thus, we enter into a music publishing relationship with our artists and help them to maximize the earning potential of their songs through all available means…CD sales, recording contracts, synchronization licenses, radio airplay, etc."
"Revenue sharing" artists effectively enter into a business relationship with ListenSmart.com as the contractual music publisher for the song(s)/composition(s). Each artist has the option of establishing this relationship on a song-by-song basis. Thus, for each "revenue sharing" song or composition, the artist will sign a standard single-song publishing contract. In exchange for establishing ListenSmart.com as their music publisher, the artist stands to potentially earn considerable immediate and future revenues. The exact distribution amounts are commensurate with the total number of downloads received by the artist's "revenue sharing" songs, relative to the songs of all the other "revenue sharing" artists.
ListenSmart.com also offers its "revenue sharing" artists online caveats, such as services through SyncSmart.com, SmartAandR.com, and the Omnipost Online Music Service, which are its sister sites. SyncSmart.com allows movie and television producers, as well as advertising agencies and other entities that license original music, to quickly find music to match their specific criteria and budget, and then negotiate rights of usage via the Internet. SmartAandR.com is an industry insider Web site that is designed to help record labels, A&R representatives and record producers looking for new material or to sign new talent. Using advanced search criteria and customizable algorithms, the site will allow recording executives to quickly find new artists, review their business standing (including their legal and management representation), overall popularity on ListenSmart.com, touring experience, availability and other factors that could hasten their signing. OmniPost Online Music Service is an optional free service for ListenSmart.com's artists that automatically posts the music of any artist who uploads their music to the ListenSmart.com site to every other MP3 or independent music site available. OmniPost is designed to provide artists with immediate, broad-based online exposure through a single, convenient entry into the online world of music.
Addressing the site and its rapidly approaching launch, Mr. Fenlon said, "We're very excited about the launch because we've spent almost nine months in preparation for it." When asked about ListenSmart.com in general, he responded "I really think the one thing that makes ListenSmart special in the online music world is its innovative business model." Indeed, with the new economy that the Internet has ushered in, new business models are not just desirable – they are required. Taking traditional businesses models and trying to force them on the intricacies of cyberspace is risky in terms of their ability to work. The Internet requires innovation, and its entrepreneurs must "think outside of the box."
While ListenSmart.com's general business model is one that shares advertising revenue with their artists who elect to sign up for the "revenue sharing" program, services are also available for artists who do not elect to participate in this program. As with "revenue sharing" artists, the music of "non-revenue sharing" artists can be uploaded to the site free of charge to be made available to music lovers for download. Additionally, they are provided with "on-demand CD production services" whereby people listening to any artist or band's music via the site and wish to purchase the CD can simply click on a button. ListenSmart.com burns the CD automatically and creates the cover, then sends it out to the customer and splits the revenue 50/50 with the artist.
ListenSmart.com – www.listensmart.com
SyncSmart.com – www.syncsmart.com
SmartAandR.com – www.smartaandr.com
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