During a keynote address at last week’s digital music conference, Webnoize ’98, E! Entertainment Television CEO Lee Masters was sounding pessimistic about the scores of companies cropping up at the intersection of music and technology.
The small aren’t going to survive, he concluded.
“I’m very cynical, ultimately, on the little guys (both companies and artists) making their way online,” said Masters, addressing an audience of mostly small-company executives. “And if you guys don’t hate me enough, by the way, there is no Santa Claus.”
Given the furious pace of strategic alliances formed as companies scramble to be heard, the lesson is that just like any business sector it takes money to succeed.
None of this should be startling news. However, many digital music companies are banking their futures on the idea that new artists will be able to emerge outside of the monolithic record labels, thanks to the democratic Web.
“The major record companies are currently dabbling in new media,” Masters said. “The little companies will clearly lead the way. But when (the record companies) follow the trend, the little companies will be trampled.”
Masters, who has been CEO at E! Entertainment since 1990, is stepping down at the end of the year. Beginning next year, Masters will be CEO of L.A. startup Liberty Interactive, which is affiliated with cable giant Tele-Communications Inc. of Englewood, Colo.
Digital versatile discs may have been greeted with some initial skepticism from the entertainment industry and some confusion from consumers, but demand is taking off.
Panasonic Disc Services Corp., the Torrance-based Panasonic subsidiary that produces DVDs for five of the local movie studios, is rapidly expanding operations. The company announced that it will double its output by April, reaching 4 million DVDs per month.
“The demand for DVDs is increasing exponentially, and we’re having a tough time keeping pace with demand,” said Harvey Mabry, general manager at Panasonic Disc Services. “However, we are expanding and will keep expanding.”
According to Mabry, the year-old company’s gross monthly revenues will also double by the spring. To accommodate its explosive growth, the company is increasing its staff and expanding its physical facilities.
Panasonic Disc Services also produces DVD-ROMS, which are slowly replacing CD-ROMS in computers, and Divx discs (the product competing with standard DVDs).
Call it the six-degrees-of-separation game, Internet style.
Launch Media Inc, the Santa Monica-based CD-ROM magazine producer, announced a distribution agreement with Infoseek Corp last week. The popular portal site and search engine will feature Launch’s music articles and album reviews. Financial details for the one-year deal were not disclosed.
The deal means that TV rivals ABC and NBC have found a common ground. Last spring, NBC purchased an equity interest in Launch, which then created co-branded music sites for NBC Online. Meanwhile, Infoseek is partially owned by Walt Disney Co., which owns ABC.
If the Internet ultimately goes through the massive shakeout that analysts predict, strange bedfellows like this will be the norm rather than the exception.
Sara Fisher can be reached via e-mail at [email protected].
