Magic Quadrant for Enterprise Backup/Recovery

Digital music delivery company Liquid Audio is to go public -- a brave move, many would have thought, in the face of increased competition from some very big players indeed. Liquid Audio gave little away about the upcoming IPO -- it simply specified a June/July timeframe for the issue, and promised pricing and quantity details at the end of this month, courtesy of a Securities and Exchange Commission filing. Liquid Audio was formed back in 1996, and quickly emerged as a company going places in the commercial online music distribution business. The trouble is, MP3 (MPEG 1 Audio Layer 3) soon afterward became the de facto standard for music downloads, and Liquid Audio has been battling to make its mark ever since. Still, that has allowed the company to push itself as the acceptable face of online music distribution, doing its damn best to beat the hordes of Internet music pirates the recording industry fears are lurking out there. And LA's Liquid Music System provides pretty much everything the indsutry might want from a digital distribution system: rights management, anti-piracy measures and control over dsitribution. What has hindered that has been the recording industry's near total lack of understanding about how the Internet and the online music business works. That lead to a kind of 'ignore it and it will go away' attitude, which worked just fine until MP3 came along and forced the business to take note. Now the industry is pondering on the opportunities for business the Net offers -- primarily pulling sales away from the retail channel and building links directly between buyer and label -- everyone and their dog is developing systems for it to use. Microsoft is pushing hard with Windows Media Technologies, IBM has its Sony-supported Electronic Music Management System, RealNetworks is promoting RealJukebox and Universal is working on its own system in conjunction with InterTrust, a system that will also provide it to fellow music industry giant BMG. That leaves Liquid Audio facing some very stiff competition indeed. Still, if the online music market is going to be as big as numerous pundits are predicting, there may well be plenty of room in the pond for a relatively small fish like Liquid Audio. If estimates of the online music business are broadly correct -- Market Tracking International, for example, reckons it will be worth $550 million next year (total music sales will reach $44 billion) -- and the major dominate online as much as they dominate sales on CD and other media, you're looking at a market of just $82.5 million for Liquid Audio to bite into. That's a lot of revenue. Much will depend not on technology but on artists. The majors are already planning to build online rights into their contracts, if they're not doing it already, and that's going to limit the opportunities for the likes of Liquid Audio. Given the company has yet to make a profit -- it lost $8.5 million on revenues of $2.8 million in 1998, $6.2 million on revenues of £256,000 in 1997 -- and unless it gets some big name signings, either artists or labels, that's situation isn't going to improve much. ® See also Recent Register online music stories

Magic Quadrant for Enterprise Backup/Recovery