Line 6 Inc. has already revolutionized the guitar amplifier industry. Now it's hoping do the same with the way online music is created.
With the help of venture firm Redpoint Ventures, the Thousand Oaks-based digital amplifier company is developing ways to allow musicians to create, record and alter music through the Internet. It is planning several Web-related products slated to debut in 2001 products it is reluctant to discuss for fear of tipping its hand to competitors.
But if history is any indication, Line 6 should continue to be very successful.
Only 4 years old, it is the fastest-growing music product company in the country, according to Music Trades magazine, the industry bible. Revenues continue to grow at a rate of about 100 percent a year, having jumped from $3.5 million in 1997 to $23 million in 1999. This year's sales are projected to be at least $40 million, according to Line 6 co-founder and Chief Technology Officer Marcus Ryle, who also says the privately held company is profitable.
The core of its business is the digital modeling amplifier, which Ryle and co-founder Michel Diodic invented and patented in 1996. The amp uses a digital signal processing computer chip. Before the product's introduction, all guitar amplifiers were made with vacuum tubes, and each had a signature sound. Blues guitarists might prefer using Fender amps, while rock guitarists used Marshalls, often stacking two of the huge amps on top of each other to produce the kind of volume and distortion recognized by anyone who's ever been to a rock concert.
Line 6 amps, using digital technology, can reproduce virtually any sound put out by any amplifier at any volume, making it extremely versatile.
"These are very sharp people," said David Angress, executive vice president of Agoura Hills-based Guitar Center Inc., the largest musical instrument retailer in the U.S. "They essentially deconstructed the popular amplifier and came up with an electronic algorithm to replicate it. It sounds remarkably like any amplifier you want."
Professional guitarists and recording studios jumped at the new product. Instead of having to buy different amps to create different sounds, a blues musician who wanted a country/western sound could simply use a Line 6 model. While traditional amplifiers still command the lion's share of the market, Line 6 has become the fourth or fifth biggest amplifier manufacturer in an industry that does around $400 million in sales a year.
Line 6 endorsers run from country music icon Clint Black to classic rock mainstay Todd Rungren to Michael Ward, guitarist of hip rock group The Wallflowers.
Name is an in-joke
The company was spun off from a music product design consulting business that Ryle and Diodic founded in 1985, called Fast Forward Designs, which no longer exists. Line 6 refers to an internal code word used at Fast Forward when the digital amplifier technology was being developed. Research required the extensive use of traditional amplifiers with the volume cranked up. Any time clients who might be curious about what was being developed came to visit, the receptionist's announcement that there was a call on "line six" (the switchboard only had five lines) signaled workers to shut down the music.
The new company was funded in part by Sutter Hill Ventures of Palo Alto, which kicked in $3.1 million in 1997. Then, this past May, despite having achieved profitability through rocketing sales, Line 6 got $10 million in a second round of funding led by Redpoint. Co-founder Ryle says the need for money took a backseat to the partnership possibilities provided by Redpoint.
"We were looking for great business partners for building a great business," he said. "The money was secondary. Both times we raised venture money, we showed them a business model that showed we could achieve what we wanted without the money."
Redpoint venture partner Peter Gotcher was chief executive at digital recording company Digidesign in the early 1990s, before it was bought by Avid Technology Inc. Now a member of Line 6's board, he brings a wealth of knowledge, as well as appreciation for the company's expertise, since Digidesign had tried but failed to create its own digital amplifier.
"There's an interesting mix of opportunity," Gotcher said. "The guitar space is a pretty big market; guitars have passed the piano as the most played instrument worldwide."
But the company's technology reaches beyond amplifiers, he is quick to point out.
"The (digital signal processing) chip is the holy grail. There's a lot of technology and IP (intellectual property) in the product. The Internet provides a level of access to content and collaboration, (and) there are specific products and services under development."
While everyone connected to the company is reluctant to provide details, it is clear that Line 6 is positioning itself to be a major player in the way music can be created online.
In much the same way the Internet has changed the way music can be purchased or simply recorded using MP3 and Napster technology, it also is going to have a profound impact on the way music is created.
Musicians already can, using digital technology, record and exchange sounds online, so that a band doesn't need to be in the same recording studio to cut an album indeed, it doesn't necessarily need the recording studio at all.
But to create the various kinds of sounds a guitarist wants, he still usually goes and buys the products at a store the amps, pedals and echoing machines that create distinct sounds. In the not-too-distant future, he won't have to.
"Before, you'd go to the store, buy the CD and play it at home," Line 6 chief executive Mike Muench said. "What the Web allowed people to do is skip that trip to the store. The same challenge exists for the musicians today to make music. You buy a product as is, go home, put it in as is and, if you want a different sound, you have to buy a different product. What we believe the Web is going to produce is products that have different abilities than if you'd buy them at the store."
Musicians are forever trying to create distinctive sounds Jimi Hendrix's distortion on "Purple Haze" or the echoing sounds used to great effect by U2 guitarist The Edge. Through digital technology and the Internet, sounds can be replicated and mixed with each other to create new sounds. But if you don't know exactly how "Purple Haze" sounds, replicating it can be frustrating.
Line 6's POD machine is a digital recording device that links directly with a guitar and can create all sorts of effects. It also comes with software that links the POD to Line 6's ToneTransfer library of guitar tones at the company's Web site. The tones, which include famous guitar sounds as well as those created by fans of the site, can be downloaded into the POD and then out through a Line 6 amp.
"You do a search, click on 'Purple Haze,' down comes that sound and away you go," Muench said.
"It's a tremendously successful product," said Guitar Center's Angress, who adds that every company trying to emulate Line 6's success with digital amplifiers "is playing catch-up."
Line 6 is continuing to invest in and develop this kind of Web-based technology. The company has more than 200 employees and is adding about 30 more a month, with heavy emphasis on engineering expertise. Going forward, it's possible that Line 6 amps and products may be directly linked to the Internet, allowing the creation of all sorts of previously unheard-of musical opportunities.
"The Web is going to have the same effect in the ways music is being created as in the ways music is being consumed," Muench said. "It's a fundamental shift."
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