Seemingly from out of nowhere, a local company has emerged to give all-purpose online music site Launch.com some competition in downloading music and videos.
Entertainment Boulevard Inc. has penned music video licensing deals with Sony Music Entertainment and EMI Recorded Music. The deals leave the L.A.-based company which is better known by its brand name, Vidnet as one of the few online ventures to sign agreements with major record labels.
The company isn’t exactly a newcomer on the Web scene; it was founded three years ago, making it ancient in the dot-com world, and went public a year and half ago. (It plans to soon change its corporate name to Vidnet Inc., so its corporate and brand names are officially the same.)
And downloadable music is only a fairly minor aspect of its business plan.
Vidnet also provides business-to-business service, digitally encoding and streaming content for other Web sites, so those sites can offer music videos and film clips. In recent months, Vidnet officials have also been pushing to broaden the content on Vidnetusa.com by expanding its music and movie offerings.
Scoring deals with Sony and EMI is a coup for Vidnet.
“I’d been working on it for the past year and finally, whether it be our persistence or our showing what we can deliver for their artists, they ended up working out the deals and taking a small equity position each company,” said Stephen Brown, Vidnet’s president and CEO.
Yet it’s uncertain whether the company can topple current music-industry leaders like Launch.com, Listen.com, ARTISTdirect.com and scores of others battling it out for users.
“It’s a pretty crowded field. To be known as a supplier of music, that is a tough thing to do. Launch is out there, the labels are doing their own thing, there’s a lot of presence out there,” said Michael Leventhal, music and tech attorney at Squadron, Ellenoff, Plesent & Sheinfeld LLP. “Some people may succeed in that, and many will crash and burn.”
The crowded online-music marketplace means that offering business-to-business services, such as Vidnet’s streaming services, may help the company survive.
Vidnet currently provides streamed content to sites including Walt Disney Co.’s Go Network, AltaVista, and teen sites Bolt and Alloy. Music videos and other filmed materials are streamed on those companies’ sites through a window that pops up on screen, but is run by Vidnet.
Relationships with these clients provide a solid backbone to the company’s other entertainment content endeavors, which are hitting the public radar screen full force since the deals with Sony and EMI.
“They haven’t been a really well-known player, as far as I know,” Leventhal said. “But they’ve done some interesting things. They’re featured on the Go Network, so it’s pretty good.”
