If catering to
niches is one way to survive the
seismic changes in the music industry, online music retailer Masterbeat LLC is ready to corner its market. Once a record label that issued compilations and DJ mixes, the company has moved into the online retail arena, launching a sleekly designed
site. While it sells traditionally released music in the electronica and dance genres, Masterbeat also sports a deep catalog of somewhat ephemeral dance remixes intended for DJ play, which are popular in clubs but have historically evaded most brick-and-mortar and online music stores.
In doing so, Masterbeat hopes to exploit a demand that's never been
properly satisfied. "Major labels have made 10, twelve, even twenty
dance remixes of hit songs and fed them to DJs for about 20 years,"
explains Brett Henrichsen, founder and president of Masterbeat. "They tend to have a short shelf life, so they
haven't been sold commercially -- labels have considered them
promos. But we want to make it so that if you hear it in a club, you can buy it."
A pair of major labels, Warner Music Group Corp. [
WMG] and Sony Music Entertainment Inc., have signed on to provide music to the store, as have several large independent labels and distributors. Henrichsen says the company is also likely to soon complete a deal with Universal Music Group , while fourth major EMI Group plc has expressed interest in participating, as well. The labels have provided exclusive content to Masterbeat, including premium-priced remixes that sell for up to $2.49 apiece--and aren't available on Apple Inc.'s [
AAPL] iTunes. After considerable negotiation, all files are DRM-free, Henrichsen says.
New York-based venture investor
Corinthian Capital -- also an investor in music retailer CD Baby Inc. and its new owner, Disc Makers -- Corinthian Asset Management took a 50% stake in Masterbeat with a $2 million seed investment. Masterbeat is already seeking a formal Series A round of roughly the same size. Henrichsen says the site is nearly out of its beta phase, but adds that the company is also working on a new version that will include a social networking component and other features.
-- Paul BonanosSee press release from Masterbeat
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