Are You Getting Enough Vitaminic?
Global Music Site Celebrates a String of Successes
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
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
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
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.
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/
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» Vitaminic - The European Giant
» Interview with Gianluca Grechi, Managing Director @ Vitaminic - MP3 Summit 2000
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