On the Record with David Goldberg

The e-music sector remains littered with competition and high profile lawsuits. Has LAUNCH Media
found the winning formula for digital music success?

LAUNCH Media CEO and chairman David Goldberg sure thinks so. While other e-music players remain focused on morphing into online record labels and digital download providers, LAUNCH is content to blaze its path as a provider of innovative online music personalization services such as LAUNCHcast.

While losses continue to mount, a burgeoning user base of over 3.5 million registered members, combined with a healthy cash position and long-term focus on broadband applications, appears to have LAUNCH positioned as a long-term e-music survivor.

However, intense competition from established media giants like Viacom’s MTV and its aggressive Internet expansion plans, could threaten to leave LAUNCH as a perennial number two in the online music world.

We recently sat down with Goldberg to discuss the future of the digital music space and LAUNCH.com’s evolution.

ISR: How would you really describe LAUNCH.com in a nutshell today?

Goldberg: We’re a destination for music fans on the Internet to get everything they want on their favorite music, learn about new music and connect with other music fans. As a company, we’re a media company focused on music to be contrasted from we’re not trying to be a record label or be an e-commerce provider of digital downloads. We’re really a media company.

ISR: But you’re not really a pure content site either?

Goldberg: Well we don’t create content per se. We work with the record labels and the artists and sort of make their content available. We’re really a content aggregator as opposed to a content creator. Obviously, we don’t take any content risks. We sort of try to have as much music as possible and then allow users to personalize their tastes.

ISR: Okay. I see. You’re providing more choices.

Goldberg: That’s really the value we provide to music fans in that traditional media – primarily radio and to a much lesser extent MTV – is not particularly a great way to learn about music. Whatever you’re doing in those traditional media forms, ninety percent of the time people don’t like what they’re hearing. What we’re able to do is give people a way to access music they like, when they want, without having to hear the stuff they don’t want.

ISR: So you’re allowing people to really personalize the aggregation experience that you’ve already put out there for them?

Goldberg: Right and to have control over that! The other way people really learn about music is from other music fans. So sort of the community aspect is another way that people can find out about great music. If you and I like four or five of the same artists, then I want to see what else you like. That might be another great way for me to learn about some music or to get excited about some of the stuff we share in common. That’s really sort of the focal point. We’re doing our job from a music fan perspective if you’re constantly being informed and entertained by the music, information and context around that music.

ISR: You referred to LAUNCH as an “aggregator” a second ago. What are you really doing different then from MTVi or ARTISTdirect , since you really don’t have much exclusive content? What are the competitive barriers you have built?

Goldberg: There are a couple of things. First of all, there’s going to be other people doing similar kinds of things like MTV and then a couple of other people. So clearly the value we provide then is in providing a really good user experience around that content aggregation. So other people have videos right now, but we’re leading because we’ve done a much better job of presenting the videos to people and helping them to find what they’re looking for. But more importantly, not only is the personalizatio

n good for the consumer, but it’s good for us. What it really does is lock that consumer into us and makes it more likely that they’ll come back to us as opposed to going to someone else. We’re not charging people subscriptions, but if you come on and tell us a lot about what you like and that helps you to have a better experience, then it also means that you’re a lot less likely to go to someone else’s site to get the same content.

ISR: Sounds very “sticky” to me.

Goldberg: So really the goal for us then is that we’re really focused on getting users to register and personalize their experience. So our LAUNCHcast product is really in a lot of ways becoming more and more the core of that personalization because once we get that information about what music you like, we can do a lot of other things about it for you – the user. But also, because people are getting so much value so quickly from personalizing, it compels them to do a lot of ratings and it compels them to get other people to come on and do ratings. We have users now on LAUNCHcast who have rated over 5,000 songs in four months! That user is never going somewhere else. Someone may have a similar kind of content experience, but we’ve got the user locked in!

ISR: It seems to me that the next logical step for LAUNCH, in terms of personalization and what you’re doing with LAUNCHcast, is to offer some type of “virtual storage lockers” for music like MP3.com’s popular My.MP3.com service?

Goldberg: I can’t comment specifically on our product plans, but clearly it’s our goal to be a complete destination for music fans and I think that the My.MP3.com and Myplay.com applications are great applications and are not particularly that difficult to build. They’re difficult to get the licenses. We believe the labels will make those licenses available to lots of people.

ISR: They’d be foolish not to…

Goldberg: Exactly. So I can’t really comment on our specific plans except to say it’s certainly something we look at pretty closely.

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