Continuing its aggressive moves in the Net music space, N2K is set to announce a two-year, $12 million online deal with Ticketmaster, an executive confirmed today.
N2K Entertainment--which recently changed its name to the Music Boulevard Network--operates retail site Music Boulevard as well as content sites Rocktropolis, Classical Insites, and Jazz Central Station.
Under the terms of the deal, Music Boulevard will be the exclusive music retailer on Ticketmaster's site, according to Jon Diamond, vice chairman of N2K.
He added that along with the $12 million, the two firms will share revenues based on a "recoupment formula," but he declined to give further details.
Diamond said the deal is "part of an ongoing strategy of locking up distribution" for N2K on the Net. He added that along with retailing, the deal includes strategic ad placement as well as joint promotions. Diamond noted that the Net has proven a lucrative space for Ticketmaster, with its online sales jumping from $100,000 in November 1996 to $7.5 million in March 1998.
He added that the alliance is "linking a very powerful brand in the entertainment market with Music Boulevard."
The Net music space has become highly competitive, with players such as CDnow inking deals with the likes of search firm Lycos and others. Traditionally content-oriented sites also are looking to tap into what many see as the potentially lucrative Net music space. Earlier this month, the Ultimate Band List announced it would start selling CDs on its music content and links site.
But these firms face a difficult road ahead. Music traditionally is a business with low margins for retailers from CD sales. And the Net music retail space--though already crowded with players--so far makes up only a tiny fraction of the multibillion-dollar overall music retail business.
Evolving Internet delivery technology and increased use of the Net as a content, marketing, and distribution channel by record labels could boost the Net as a viable, money-making home for music, however.
"The Ticketmaster customer is an affluent, active buyer, which is a core demographic for us," N2K's Diamond said. He added that the Music Boulevard Network's combination of specialized content sites as well as retail is a "big differentiator as to why our partners want to work with us."