The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
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The value that Muze can bring to a retailer can be seen in the experience of Biblio.com, which says it has benefited from being able to provide more detailed information to customers. "We`ve already seen a great increase in sales," says Kevin Donaldson, director of sales and marketing.
In the past, customers came to Biblio when they had a specific book in mind, Donaldson says. "Now, people can come to our site and they can shop, browse, do what they do on Amazon," he says. "We`re becoming more of a shopping experience and less of a pure research type of service."
Access to the Muze database also provides a foundation if Biblio decides to sell music or media, Donaldson says. "If we want to branch out, that door is open to us," he says.
Donaldson says he is not concerned that Muze provides the same information to Biblio`s competitors. "The more information that`s available to customers, the better," he says. "I wish all of our competitors offered something like this. That would keep people more informed."
Not all of Muze`s products have proven as valuable to retailers as its core information services. Such is the case with last year`s attempt at providing an e-commerce platform and fulfillment service--the Mind, Body, Spirit web site--to health clubs and health-care related entities.
Under that program, Muze created a storefront indistinguishable from the retailer`s own site and stocked it with book, music, and video titles with health and wellness themes. Products shipped to customers carried the name of the retailer.
But Stensrud says the product was too narrowly focused. "We had a small number of customers and virtually no revenue," he says. Although Muze shut down the operation, the company expects to launch other, broader-based e-commerce initiatives that will provide software and services to enhance e-retailers` sites, he says.
Despite the setback with the Mind, Body, Spirit site, Muze continues to evolve as new entertainment forms, such as digital content, emerge. Transforming Muze into a company that will thrive in the digital age is a top priority, says Stensrud. "We`re moving from a world of physical content to a world of digital content, and that implies that companies like Muze have to make a significant investment in technology to track that transformation," Stensrud says.
Muze`s goal is to provide the same type of meta-data on digital content as it does on CDs, books, videos, DVDs and games. "The industry needs the same set of data and cataloging services for digital media as it has for physical media," he says. The challenge, however, is that digital content doesn`t carry the same information that physical content does--such as liner notes, readily viewable playing times and track lists--and so Muze will have to establish not only new categories of what it will report but also new ways of gathering that information.
Stensrud foresees the day when Muze will provide to retailers information on content, such as ring tones, computer wallpaper, and television programs. While Muze hasn`t defined exactly what that information will look like, it believes it needs to move with the market as portable devices become more popular. "These are all things that will become part of the greater assembly of media in the future," Stensrud says. Customers for such information could include companies that provide games and content for mobile devices--such as JAMDAT Mobile Inc., a provider of wireless entertainment content, as well as mobile carriers such as Verizon Communications Inc.
One major change needed to bring Muze into the digital age is for it to capture data electronically. "Right now, most data are taken from physical media and keyed in by an experienced editor," Stensrud says. "Over time, we will move toward taking data in a digital format and allow the editors to spend their time editing (content) and adding value."
Muze also will be investing in the technology by which it delivers its product, Stensrud says. "We`re going to move from essentially a publisher of information to being an online resource for information in a wide variety of formats," he says.
Currently, customers download content from Muze in one large file. But many retailers are asking Muze to host the content on its own site. "Our customers have said it would be more convenient if we hosted that data online and gave them access to the pieces of it that they need, when they need it," he says.
Stensrud sees many opportunities ahead for Muze. "Our retail customers have very common problems and they all have staffing constraints," he says. "If we can take our basic product and build new services on top of that, and enable our customers to deliver better services with lower investment, there`s a win for everybody."
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