Custom CD site enters race

With so many players in the online music space, firms that now want to start selling CDs on the Net have to fight to differentiate themselves.

Enter My CD, which is planning to launch a service on May 1 that lets customers choose individual tracks from a library of songs to make a customized CD.

My CD is not the first company to approach online CD sales this way, however. SuperSonic Boom, which launched in January 1997, offers the same service. Others include MusicMaker, Volatile Music, and CustomDisc.com.

With My CD, users can listen to 30-second samples, choose the songs they want for a 70-minute CD, and send the information to My CD. The firm then "burns" the CD and ships it to the user. Users also can choose cover art. At launch, the service will have roughly 100 pieces of cover art that it commissioned. Artists' names, liner notes, song titles, and running times also can be printed on the inserts. Each CD costs $16.99 plus shipping, according to Denise Shapiro, chief marketing officer for My CD.

Shapiro said the firm is planning to expand its offerings so that users will be able to upload their own cover art and record labels will be able to include "collateral material" such as coupons.

Although the concept makes sense, the main issue is "the depth and breadth of the catalog these players can provide," said Patrick Keane, senior analyst at Jupiter Communications. "You need to have a rich catalog of music to succeed in this space, and so far, a lot of the big record labels are averse to giving that content out."

Shapiro said My CD pays its record label partners per song when a track is sold. She declined to give specific figures. In addition, like SuperSonic Boom, My CD has compliance with licensing mandates exercised by the American Society of Composers, Artists, and Publishers (ASCAP) and BMI built into its business model.

Although record labels could use these custom CD outlets as an additional revenue stream, cooperating with them also means relinquishing some all-important control over the distribution of their product. In this day of ever-easier and wider-ranging copyright violations through pirated CDs and MP3 (MPEG 1 layer 3) sites, the labels "generally have moved at a glacial pace in moving into [the Net] space," Keane noted.

For that reason, the custom-compilation services tend to offer less well-known bands and older or less popular selections from more famous artists. Shapiro said My CD would carry artists such as James Brown, Frank Sinatra, Eric Clapton, Steely Dan, and Aretha Franklin--along with newer and lesser-known artists. A search on Frank Sinatra today yielded eight tracks, mostly less-popular songs. Some of the same tracks are available on SuperSonic Boom, along with several others. A custom CD on SuperSonic Boom also costs $16.99 plus shipping.

The Net music retail space is a tough market on other fronts as well. With relatively small margins for retailers and the built-in challenge of creating brand recognition, the flood of players entering the arena have their work cut out for them. Some of the more traditional retailers such as CDnow and Music Boulevard have spent significant resources in attracting customers through expensive deals with popular sites and special offers, such as paying for shipping or give-aways with purchase. Those deals also cut into the firms' revenues.

Record labels on board with My CD include: 32 Records, Alligator Records, American Gramophone, Bar None, Clarity Records, Drive Entertainment, Lyra Productions, Nine Bar Records, Qbadisc, TKO-Magnum, and Warlock Records, the company said.