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Music e-commerce site launched

6 December 1999

Music e-commerce site launched

The New Zealand music industry gets a boost today with the launch of this country’s first ‘clicks and mortar’ music and entertainment Internet site.

National music retailer Sounds Records has combined with Wellington-based new media company Hyperactive in a joint venture to launch Sounds Online.

The venture combines the bricks and mortar, music industry expertise of Sounds Records with the “clicks” experience of Hyperactive, a respected new media company founded in 1994.

Visitors to the site eventually will be able to not only buy CDs and tapes but also listen to an exclusive online radio station, download music, interact with the site, watch video clips and movies and access an Online magazine which is updated daily.

The joint venture is called Sounds Select. Sounds has subscribed to 70 per cent of the capital while Hyperactive is a 30 per cent shareholder.

Executive directors of the business are Sounds managing director Sean Coleman and Mark Tierney from Hyperactive, formerly a member of successful New Zealand band Strawpeople and well known in new media, television and advertising circles.

A third director is Rajiv Dhawan representing Australian venture capitalists Hambro- Grantham. Operations manager is Steve Cadman, formerly with HMV in the UK.

Online sales of music will comprise between 10 and 15 per cent of all sales globally by 2003, Coleman says.

“In New Zealand, we believe online music retailing will account for about 15 per cent of music sales within four years. Our business plan is to achieve half that — that is, $15 million turnover — by 2003.

“This is a ‘clicks and mortar’ site; having stores to back up the online sales is so important to the success of the business.”

Coleman has in eight years built Sounds Records into a $40 million-plus business employing more than 200 staff from Whangarei to Invercargill. The company has 25 per cent of the New Zealand music market.

Hyperactive has completed more than 500 new media projects in its five years and production has always been a strength of the business, Tierney says. More recently, “strategic and marketing partnerships providing complete new media solutions” have grown in importance to the business.

The directors say they have a three-phase approach to Sounds Online. Stage one launched today comprises physical product delivery.

Stage two involves the digital downloading side of the business and this should be complete by 1 March 2000.

The third stage is identified by Coleman as being “other services under the same brand but not just core music related”.

Hyperactive had approached Sounds about establishing an e-commerce site and the partners chose the joint venture route for two main reasons, Coleman said.

“Hyperactive has normally acted as a supplier but made the decision that it wanted a share of the e-commerce future. For ourselves, we needed the expertise of
Hyperactive and their support because the value of the site far outstrips the dollars and cents investment in it.”

Mark Tierney says www.soundsnz.com will be the fastest e-commerce Internet site available in this country.

“This site has been built from the ground up after a full 12 months of research both in New Zealand the United States and Australia,” Mark Tierney says.

“It is a full, state-of-the-art graphic environment and cost more than a million dollars to set up. This is a serious business and we’re aiming to make a profit in year two.”

Coleman says by 1 March 2,000 you’ll be able to access more than 600,000 music titles through Sounds Online. Already the site has every record available in New Zealand — all 20,000 of them.

“A big part of the site is its ability to interact with visitors,” Coleman says. “The site will also feature six Avatars or helpers who help form a ‘relationship’ with consumers guided by the site areas they visit.

“For example, if you’re a Billy Joel fan and you visit that part of the site regularly, your Avatar will get to know you and guide you to other areas or items you could be interested in.”

The grunt for www.soundsnz.com is provided by an IBM Netfinity 7000 web cluster and an IBM Netfinity 5500 database cluster and four G4 Macs which will act as streaming media servers.

The whole thing is supported by a 100 Megabit fibre-optic backbone connected to Citylink in Wellington Tierney says.

“We’ve built the site around Macromedia’s Flash 4. The key to the whole thing is the database — which will be the biggest music one in the country — and the speedy servers coupled with super-efficient e-commerce verification,” Tierney said.

Sean Coleman says Sounds Online brings together a number of elements important to the successful operation of an e-commerce site.

“It’s ‘clicks and mortar’ at its best — an Internet site backed by a substantial and focused national retail chain. So if you feel a craving for human contact, there’s always a Sounds store nearby — the choice is yours.

“Ultimately, Sounds Online is an entertainment site,” Coleman said.

The new site is fully operational from today (Monday December 6, 1999).

ends

Released by 141 Palace Plus for Sounds Online

Contacts:
Sean Coleman Mark Tierney Deborah Pead

Sounds, Hyperactive, 141 Palace Plus
Tel: 0-9-478 0703 -0-9—377 8334- 0-9-358 0141
Mob: 021-675 176 -025-543 221- 021-612 919
e-mail: seanc@sounds.co.nz -markt@hyperactive.co.nz -deborahp@palaceplus.co.nz

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