In its second-largest acquisition, Amazon buys the company for $970 million.
With a new owner and some new money, Muze looks for ways to branch out
Muze is one of those brands that almost all consumers have used but most have never heard of. Anyone who`s researched a book at BarnesandNoble.com or listened to a sound clip of a recently released CD at Tower Records--or engaged in similar activities at any number of other retail web sites and stores--has used its service.
Muze had a modest start nearly 20 years ago as a commercially sponsored syndicated radio feature that answered listeners` questions about compact discs. From that beginning, it has expanded into an entertainment information powerhouse that offers a wide range of content not only about CDs, but also about books, videos, DVDs and games. And it can be found in stores and on web sites of almost every major retailer of those media.
With that kind of established market position, some companies might be content with the status quo. But with an infusion of capital from new owner Enterprise Partners Venture Capital and under the leadership of new CEO Bill Stensrud, Muze is poised to break into another new media segment--providing information on digital content.
Stensrud, also board chairman at Muze, replaced cofounder and former CEO Paul Zullo on July 1, when Zullo stepped down as chief executive for undisclosed reasons. Stensrud was managing director of Enterprise Partners, which in May acquired Muze for $30 million.
As is often the case with successful ventures, the experience of an individual planted the seed from which Muze grew. In Muze`s case, the inspiration arose from Zullo`s frustration with not being able to find information on new CD releases in the 1980s, when compact discs first came on the scene.
At the time, CD releases were sporadic because there were only two manufacturers of compact discs. There was no way of knowing which artists had CDs coming out, when the CDs would appear in stores, or whether the CD was a new release or a reissue of a previously released album or tape. "I`d become a fan of the compact disc," Zullo recounted before he departed Muze. "But when I went shopping, I couldn`t get accurate information on what was in the distribution pipeline."
Even Zullo`s friends in the music industry--he produced a syndicated radio concert program at the time and so had contacts in the industry-- couldn`t give him any information. "I would call my friends at Warner Brothers and ask if, say, the Van Morrison CD is in print and they would say nobody keeps track of that," he says.
Convinced he wasn`t the only one looking for such information, Zullo in 1986 found financial backers, began developing a database and launched Muze`s predecessor, a radio service called Digital Radio Network. Zullo describes one of the network`s products--the CD Hotline, a syndicated call-in program for radio listeners--as an early Internet-style application--without the Internet and without a consumer interface. "Instead of typing their requests, listeners talked to an operator who did the typing," he says.
The move to kiosks
Muze`s service became more sophisticated as new technologies emerged. In 1989, the company began installing free-standing, consumer-activated computer kiosks in record stores, financed in part by the Grateful Dead`s Bob Weir. Later, the company added information on videos, books, DVDs and games.
In the mid-1990s, Muze began setting up Internet access to its database via the in-store kiosks and online retailers` web sites. Today, Muze kiosks are in more than 1,500 stores representing almost every major U.S. retailer of music, books, videos and games. Customers include Virgin Megastores; Trans World Entertainment, which operates FYE, Coconuts Music and Movies, Wherehouse Music and other brands; Barnes & Noble; Borders and Hastings Entertainment Inc.
The company also provides content to 250 online retailers of music, books and videos, including Yahoo, America Online, Tower Records, Best Buy and Real Networks. It recently added Biblio.com, seller of used, rare and out of print books.
Muze compiles its database by aggregating information from hundreds of major distributors-- including record labels and publishers--in each media category. In the popular music category, Muze has information on 440,000 albums representing 85,000 artists and performers, with more than 3,000 titles added monthly. Its book category is divided into MuzeBooks In-Print (1.9 million titles) and Muze Out-of-Print (3.6 million titles). Its database also carries information on 156,000 videos and 65,000 DVD releases.
What Muze adds to the mix is meta-data--the songs on an album, the type of music or book, critics` reviews, and other information. Its editors read, watch or listen to the top releases in each category--about 20% of the titles--and then write descriptions. They also gather reviews and other information from newspapers, magazines, and other sources.
Something for the small guys
Customers can search for information using multiple keywords. For example, a music buyer could track down an album by title, song, artist, or a keyword in the song.
Muze also has a service called Muze Tunes, which offers 30-second audio clips from millions of songs, available online and in some stores. Muze recently took the service one step further with an experimental marketing program in which music store customers can preview an entire CD for a month prior to its release in stores.
Muze also offers a service to eBay members in which sellers can type in a uniform pricing code number for a book, CD or video and Muze will provide a photo of the cover and the meta-data describing the product, making sophisticated product information available to even the smallest sellers. "It saves the seller from having to come up with a description and scan a cover in," Zullo says.
Muze`s closest competitor is AMG--the All Music Guide--which provides information on CDs, books, videos, DVDs and games directly to consumers as well as to retailers. Muze provides content solely to retailers.
AMG has data on 838,595 albums, 281,092 films, and 75,143 DVDs. Its customers include Barnes & Noble, Best Buy, Ticketmaster, MusicMatch, Amazon, and Napster.