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Are You Getting Enough Vitaminic?
Global Music Site Celebrates a String of Successes
By Heather Johnson
(more articles from this author)
2001-03-21
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Vitaminic must have missed the memo announcing the end of the dot.com boom. The music company, formed in 1999, is expanding to include new partners and new content, resulting in greater revenue and a wider global audience.

Because Vitaminic launched after the initial boom of the Internet industry, the founders had an opportunity to learn from the mistakes and successes of their older competitors, according to Gianluca Grechi, U.S. Managing Director for Vitaminic. Grechi noted that because the company was originally launched in Italy, the European economy also played an important role. "The stock market in the U.S. went through the roof and then down to the bottom, but Europe didn't experience that big bubble," he said. "Now our stock price is 30 to 40 percent above the IPO price, which is amazing compared to other Internet sites."

The company also maintains ethical standards. "We look at copyright issues," Grechi continues. "We try to work with the industry to find solutions to the problems. We don't try to push the envelope and don't want to fight with the players in the industry."

Their ability to create "win-win" situations has resulted in the signing of three consecutive distribution deals with BMG Entertainment, Universal Music Group and Sony Entertainment. Through these agreements, Vitaminic can now offer tracks from the labels' extensive catalogs, which collectively includes such chart-toppers as Christina Aguilera, Santana, Jennifer Lopez, Bruce Springsteen, Shania Twain and many others. Downloadable tracks of these top artists will be available for purchase through Vitaminic's U.S. web site, located at www.vitaminic.com.

The recent signings prove that buying and listening to music online plays an important role in the entertainment industry. "We will continue to aggressively pursue agreements with other significant businesses in the music industry, with the ultimate goal of offering the best selection of digital music in the world at Vitaminic.com," Grechi said.

BMG was the first to jump on board, announcing a distribution partnership with Vitaminic in December 2000. Sony Entertainment also realized the advantages of aligning with Vitaminic, and proposed a retail partnership to secure commercial digital downloads in January 2001. One month later, Vitaminic announced an affiliate agreement with Universal to offer their bluematter digital music product. Hundreds of songs from Universal artists are now available for purchase through the site.

After upgrades to the site content, Vitaminic turned its attention to overseas ventures. Just this month, Vitaminic formed an alliance with Eurekan Multim*dia S.A., the company that owns the online digital music web sites - FranceMP3.com and MP3France.com. Vitaminic entered into a Memorandum of Understanding (MoU) for the acquisition of the whole share capital of Eurekan Multim*dia S.A., pushing Vitaminic into a leading position in the French market.

The Eurekan acquisition will add a digital catalog of 4,800 artists (including the largest on line catalog of signed and unsigned French artists), 35,000 tracks, 315 record labels and 340,000 unique visitors to Vitaminic's French site. The site was already a successful one, due in part to its Paris offices and a recent signing with Wanadoo S.A. of France Telecom Group to provide www.wanadoo.fr and www.voila.fr with Vitaminic's content and technology platform.

The transaction will involve an increase in Vitaminic's share capital by issuing 250,000 new shares that will be reserved to Eurekan Multim*dia S.A.'s shareholders. The share capital of Eurekan Multim*dia S.A. is currently owned by venture capitalists and strategic partners such as Galileo II (23.6%), NEMM GESTION S.A. (4.4%), FD5 S.A. (19.7%) and e-NRJ (16.1%) by the Company's founders and by other investors.

The transaction shall be subject to the satisfactory completion of a "due diligence" regarding the economic, financial and legal status of Eurekan Multim*dia S.A., to be concluded in mid-April.

The Italian market is also healthier thanks to a recent Vitaminic prescription. Vitaminic and MTV Italy signed a new agreement that enlarges the well established, co-branded MTV-Vitaminic section with new content designed specifically for MP3 fans.

As part of the agreement, Vitaminic will provide content for MTV Italy's CD Cafe, which highlights four CDs each week; a disc of the week; the top ten requested tracks on Vitaminic's Italian site; A Spotlight showcasing four new CDs each week; a "Vitaminic Tour," which will highlight five records and give a musical history lesson; and a Label of the Week, which will profile a different record label each week including a history of the label and its artists.

Vitaminic and MTV will both reap financial awards through the agreement. The companies will share revenues from e-commerce transactions, as well as profits from banner advertising and sponsorship agreements.

Continuing their assault on the European market, Vitaminic recently launched both a Danish and Irish site. The new Irish site, located at www.vitaminic.ie, is managed from the company's UK office and includes music from top Irish artists as well as worldwide celebrities such as Eminem, John Lee Hooker and others. The site also gives Irish musicians the opportunity to promote and market themselves locally and internationally by uploading their music for online transmission. The company's Danish site is similar in structure and can be found at www.vitaminic.dk

Obviously, Vitaminic's global approach is working, and the fruits of their labor appear in their bottom line. The company's revenues for the last quarter of 2000 increased by 68 percent compared to third quarter revenues and their total revenues for the year reached ITL 3,632 million (1.88 million Euros - US$1,683,540).

Vitaminic is now known as one of the leading platforms for the promotion and distribution of digital music on the Internet and other digital networks. Using the latest broadband and wireless communications technologies, the company offers content from both independent artists and record companies to consumers via major Internet portals, ISPs and mobile operators. Artists and record labels have an opportunity to promote and sell their music online, and music fans have access to one of the Internet's most comprehensive legal digital music catalogs.

2001 promises to be another landmark year. Vitaminic is currently in discussions with Warner Bros. and EMI regarding distribution agreements, which would give them access to music from all five major record labels. The company also recently launched their new subscription program, called the "Vitaminic Music Club." For a six-month or annual fee, club members would receive unlimited downloads, and could download a single track up to three times. The service launched in Italy in early March, and should be included on all other Vitaminic sites by the end of the month.

Linkography

BMG - www.bmg.com
EMI - www.emigroup.com
Eurekan - www.eurekan.com
FranceMP3.com - www.francemp3.com
MP3France.com - www.mp3france.com
MTV Italy - www.mtv.it
Sony - www.sonymusic.com
Universal - www.universalmusic.com
Vitaminic Holland - www.vitaminic.dk
Vitaminic Ireland - www.vitaminic.ie
Voila! - www.voila.fr
Vitaminic UK - www.vitaminic.co.uk
Vitaminic US - www.vitaminic.com
Wanadoo - www.wanadoo.fr
Warner Music Group - www.warner.com/music/

Related MusicDish e-Journal Articles:
» Vitaminic and Omnitel 2000 Partner to Entertain Omnitel Cellular Customers (2000-08-21)
» Vitaminic - The European Giant (2000-06-28)
» Interview with Gianluca Grechi, Managing Director @ Vitaminic - MP3 Summit 2000 (2000-06-28)

Related News from Mi2N:
» Vitaminic Spa Signs Memorandum Of Understanding For Acquisition Of FranceMP3
» Vitaminic And MTV Italia Strengthen Their Partnership
» New "Vitaminic Lounge Club" Compilation Now Available
» Vitaminic Launches Irish Site
» Improved Revenue Growth For Vitaminic In Q4 2000
» Vitaminic Scores 'HAT Trick'


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