SARA FISHER

Staff Reporter

While most major record-label executives hem and haw over how to harness the Internet as it begins to transfigure the music industry, Al Teller has jumped right in.

Santa Monica-based Atomic Pop the new music company founded by Teller, the former head of MCA Music Group and one-time president of CBS Records is entirely online. It shifts the real-world functions of a music label such as marketing and promotion to the Internet, where the overhead costs are lower and the potential audience reach much greater than radio or print.

"Just as in any industry, the leaders of a major change won't be the major players," said Teller, who helped shape the careers of Tom Petty, Bruce Springsteen and Elton John, among many others.

"It's usually a small venture that will push the envelope. And that's what we're doing. If the Web is used properly, it opens up enormous opportunities in the music industry rather than limiting it."

Officially launched last month, Atomic Pop follows the more-is-better philosophy of online content and runs a sensory-overloaded site crammed with pop culture and music offerings. The company features an online radio station, video game section, music news, and an online store selling everything from comic books and clothes to DVDs and CDs.

For artists signed to the Atomic Pop label, there are Web pages filled with the latest news about the band, snippets of their videos and interviews, and songs that can be heard on the site or digitally downloaded. There also are plans to produce and sell albums both online and at music stores.

While a formal advertising campaign is several months off, the site already draws about 5,000 visitors a day, even though it faces competition from sites offered by MTV for music news, House of Blues for live concert Web-casts, and San Diego-based MP3.com for digital downloads.

Still, there are many imponderables. "A lot of what Teller is doing is untested: No one has shown that an artist can reach comparable exposure via the Internet rather than the traditional radio play and advertising push route," said Mark Hardie, senior analyst at Forrester Research Inc.'s entertainment and technology group. "(Atomic Pop) wants the consumer to take on the burden of seeking out their music amid the jumble of the Internet, which is like going to a flea market as opposed to going to the mall. I find that difficult."

Nevertheless, several bands already have signed up. "We don't want to be left behind in the technological dust," said Donita Sparks, lead singer of the punk band L7. "Right now, it's really early for digital distribution, but it has major potential for the future. It also gives us a chance to get something to the fans who were foaming at the mouth before our next album goes out."

Hip-hop band Blood of Abraham chose to sign with Atomic Pop instead of labels like Sony and what was previously Interscope Records.

"The company is so different from the standard labels out there," said band member Benyad. "Everything is custom fit and personal interaction."

Teller sees the Internet as the optimal, cost-effective way to break through the marketing bottlenecks of radio stations and music stores.

"This is a case of when not if we break the first act online," said Teller, who was a computer programmer in the late '70s and wanted to develop an Internet initiative at MCA in the early '90s. "We are at the beginning of the Internet's effect on the music industry. When the dust settles, it will change every area of business for us."

Atomic Pop also is attracting industry attention for offering music in the controversial MP3 format, which some critics view as synonymous with piracy. Fans can download, listen and even record the CD-quality, MP3 songs for free as part of the company's effort to generate publicity for its artists.

But Teller says that Atomic Pop is agnostic on technology and offers music in other formats, including RealAudio and Liquid Audio, which can only be listened to rather than downloaded and saved.

"We'll make the music available through whatever system works best and what the music consumers want to use," he said.

As the fledgling company develops and establishes its e-commerce operation as its primary source of revenue, Teller himself is Atomic Pop's biggest asset. He pulled together a group of private investors who, along with himself, anted up the seed money for the Internet company.

"Teller's bankable reputation will be what swings future funding and artists Atomic Pop's way," Hardie said.

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