Little Bugs in a Big Web
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But CEO and president Gene Hoffman, a 23-year-old computer whiz who recently appeared on the cover of Forbes, told that magazine he’s never played a vinyl record. He founded EMusic (under the name GoodNoise) less than two years ago with Robert Kohn, the attorney who literally wrote the book on music licensing–Kohn on Music Licensing–with his father, Al, a retired vice president for Warner Brothers. EMusic’s own VP of business affairs is Gary Culpepper, a lawyer who over the past two decades has held high positions at A&M, ABC Records, Casablanca, Capitol, Paramount, and Sony. Though it has yet to turn a profit, Forbes reports, EMusic is presently worth $743 million.
Independent labels have often sniffed out trends and discovered talent before the major labels, and now for better or worse they’re blazing trails in the field of digital music distribution. The big five music companies have taken a wait-and-see stance toward the dominant format–MPEG-1 Audio Layer 3, or MP3–because they think it’s too easy to pirate, though most claim to have some kind of digital distribution venture in the works. A number of significant independent labels also harbor reservations; Chicago labels Thrill Jockey, Touch and Go, and Minty Fresh have all rebuffed several suitors. But those who’ve made the leap seem optimistic. “We’re looking at it more as a marketing tool than as a way to sell actual music,” says Doug LeFrak of the local Sugar Free label, which recently signed an 18-month contract with a company called CDuctive, joining peers like Flydaddy, Kill Rock Stars, and the local Beluga imprint. Whereas an independent label can only get its records into so many stores, LeFrak says, on the Web its wares can be inspected by almost anyone with a computer. And while the sites charge for most downloads–on EMusic a single track costs 99 cents, an LP $8.99–they also offer dozens of free samples.
“I can’t make any promises that EMusic won’t be sold to someone, and it’s probably more likely than not that it will happen at some point,” says Price. “But if EMusic gets purchased it’s going to happen because it’s successful. I can’t guarantee that the current staff will still be there, but if it’s bought by a bigger company it will only increase Web traffic.”
