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Music fans already have a lot of choices on the World Wide Web.

There is MP3.com for those dying to hear cutting-edge music that usually isn’t played on the radio. There’s MusicMaker.com, which allows listeners to customize their own compact discs. There’s also eMusic.com for rabid fans who want to get news updates on their favorite groups and download tracks that aren’t available on their records.

In an already crowded online market, what niche does Encino-based Artist Direct Inc. anticipate filling after its upcoming initial public offering?

All of the above.

That may be the wisest move, say analysts. In the rapidly changing world of the Internet, there’s no telling which direction the online music market will turn. Artist Direct best described as a music retailer/talent agency/record company has at least a foothold in a variety of different areas.

“Almost everyone expects it to be a very big opportunity,” said Sara Zeilstra, an analyst with Warburg Dillon Read LLC in New York. “But the biggest question in the online music industry right now is, what models of the business are going to work?”

Like MP3.com, the Artist Direct Network offers downloadable music from bands that don’t have record contracts. Like MusicMaker, customers to Artist Direct can download songs from a variety of genres. And like eMusic, there are exclusive releases on Artist Direct from best-selling artists.

Artist Direct Inc. is actually a network comprised of four Web sites: artistdirect.com caters to fans of big-ticket rock stars like the Beastie Boys and Tori Amos; UBL.com (the “ultimate band list”) acts as a search engine that gives fans access to more than 70,000 Web sites on their favorite bands; imusic.com allows fans to participate in chats with and about their favorite bands; and downloadsdirect.com provides free downloads of songs by unsigned bands.

Alongside these sites is Artist Direct’s online store, which sells everything from T-shirts to compact discs. About 4 million people look at Artist Direct’s Web sites each month.

Besides its online presence, Artist Direct has two other branches to develop musical talent. There also is the Artist Direct Agency, dedicated to signing new bands and giving them exposure online, and a record label, Kneeling Elephant, that can give these artists a distribution point in the physical world.

Currently, most of Artist Direct’s revenues come from agency fees, but company officials believe their future business success depends on the ability to increase revenue from e-commerce. The company is trying to address ways to make online shopping easier, especially from the under-18 set, who are the most rabid fans of online music but have the least access to credit cards.

The online music industry is expected to reach $2.6 billion by 2003, according to Internet research firm Jupiter Communications, compared with just $152 million in 1998.

In 1997, Artist Direct had $269,000 in revenue stemming from e-commerce. By the end of 1998, that had grown to more than $1.5 million, one-third of the total revenues for the year. Nonetheless, Artist Direct reported losses of $460,000 in 1997, and $6.3 million in 1998.

The precise amount of stock being offered and the cost per share has not been determined yet, according to documents filed with the Securities and Exchange Commission, though the company is looking to raise $86.3 million. Officials declined to comment on the filing, citing the quiet period.

According to SEC filings, the money raised in the IPO will be used for marketing and advertising. “There’s so much noise right now, everyone is trying to get themselves noticed above the crowd,” Zeilstra said. “As the online music industry matures, spending on marketing will taper off as revenues, hopefully, continue to grow.”

Currently, Artist Direct is trying to boost its name recognition by sponsoring several big-ticket events.

The first Best of Web Awards were held last week at the House of Blues. Winners were selected by the number of votes they received in Artist Direct’s Born on the World Wide Web contest. In addition, Artist Direct is co-sponsored the Coachella Music Festival, held last weekend in Indio.

Artist Direct is led by two highly influential music executives. Chairman and Chief Executive Marc Geiger, 36, was an agent with the William Morris Agency and co-founded the alternative rock tour Lollapalooza in 1991. Donald P. Muller, 38, who acts as president of the talent agency and record company, ran the contemporary music division at William Morris, where his client roster included Pearl Jam, Nirvana and Rage Against the Machine.

This summer, Artist Direct closed $15 million in equity financing from investors like Bear Stearns Asset Management Group and Chase Capital Ventures. Morgan Stanley Dean Witter, Bear Stearns & Co. Inc. and Deutsche Banc Alex Brown are underwriting the IPO.

If the IPO can match the success of its competitors, it should be a big offering. San Diego-based MP3.com Inc. raised $344 million in its IPO.

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