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Summary:

Online music discovery and sharing sites are a dime a dozen, but they still continue to launch. For those watching this phenomenon and wondering why new startups keep entering a crowded — and relatively unprofitable — market, look no further than Kasian Franks, CEO of Seeqpod, […]

Online music discovery and sharing sites are a dime a dozen, but they still continue to launch. For those watching this phenomenon and wondering why new startups keep entering a crowded — and relatively unprofitable — market, look no further than Kasian Franks, CEO of Seeqpod, and Dan Kaufman, CEO of Jango.

Each CEO sees music as the killer application that will lead their users into more lucrative enterprises. With Jango, which is a cross between an Internet radio station and social network, the business proposition is to license the ability to stream the music as an online radio station (as opposed to striking deals with individual recording companies), build a social network around that streaming music, and then sell targeted ads.

Jango, which launched its beta in December and has raised about $2 million from angels, allows users to type in the name of an artist and immediately hear their songs. A list of additional recommended artists is also provided. The user clicks on each band or singer to create one or several personalized radio stations, and those radio stations are shared among Jango’s users.

Kaufman, who points to services such as Imeem, Last.fm and iLike as places where people can go to find music online, says Jango is more social, and notes that the social component leads to more page views and a targeted space for advertisers. Advertisers on the big social networks don’t know where their ads may appear, he claims, so it’s worth it for certain advertisers — especially those promoting artists — to sign up with Jango. In addition to ad revenue, Jango plans to make money on transaction fees for selling music on the site, and like Internet radio stations Pandora and Slacker, will charge subscription fees for those who want to avoid ads or get access to more features.

Jango’s model is fairly conventional, in that it relies on music to build an ad-supported social network that uses ads to monetize its users. Seeqpod is different — it’s using music as a way to sell its search technology and recommendation engine. The startup, which has raised close to $4.5 million from angels, has exclusively licensed search technology from the Lawrence Berkley National Laboratory.

Taking a cue from Chinese search giant, Baidu, which has a popular MP3 search function, Franks decided that music was indeed something universal enough to get users to try out the search engine. Visitors to the Seeqpod site see a search box similar to the one at the top of the Google homepage, but also get a list of currently searched-for music that scrolls underneath that box. After the user types in the song for which he is looking, Seeqpod searches for it on the Internet and begins playing it (but not hosting it, so as to avoid legal issues).

Songs related to the search inquiry are also shown as part of Seeqpod’s recommendation capabilities. Franks says Seeqpod plans to add video search and discovery in the future, and to advertise against its results, much like Google does. In a program similar to Google’s AdWords, Seeqpod plans to work with individual artists to show ads on their sites based on music searches and split the revenue from showing the ads. Franks maintains that music is the best way to get user adoption and for Seeqpod to garner the ad revenue associated with a successful search engine. A similar music recommendation site with an eye on larger markets is MyStrands.

“Music is a suberb strategic platform for rolling out services and promotion,” Franks says. “There’s no Powerset or Kosmix here. Consumers don’t care about the search engine; [search engines] are a transition point that enables them to get to another place on the web.”

Both startups are using music as a differentiator to get market share in a crowded space that is dominated by giants: In Jango’s case, music will have to push it past Facebook and MySpace, while Seeqpod has set itself against Google. Consumers may love their tunes, but hitting the right notes with enough of them will be a challenge.

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By Stacey Higginbotham

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  1. Not sure that focusing on a controversial area, copyright music, is the best way for Seeqpod to show off its search engine. I doubt they avoid legal risks by “not hosting” the music. Napster didn’t host it, either. Also, most of the music video results are invalid. When I clicked to view them, most of the YouTube videos said they are no longer available.

  2. isn’t Dan Kaufman the guy who ran Direct Revenue? http://www.direct-revenue.com and http://www.benedelman.org/spyware/nyag-dr/

    Is this new venture spyware that I will never get off my computer.

  3. I can’t speak for the others but I run TasteStalkr. The reason I started it, was to learn more about information extraction, and web indexing. Their aren’t many people who will pay you to learn those things on the job.

    A reason why music startups are so prevalent might be their emotional connection. Music has a lot or people the a really connected to music at an emotional level. They might just enjoy making software that has to do with music. That is definitely the reason why I started my site.

  4. Who Will Be Able to Monetize Music « nPost Startup Blog Wednesday, January 9, 2008

    [...] Who Will Be Able to Monetize Music Jango and Seeqpod are trying… [...]

  5. Links for 1.9.08: Yahoo’s open tunes, Tasers with mp3 players, free Shins… « the listenerd Wednesday, January 9, 2008

    [...] A longish GigaOm article on Seeqpod and [...]

  6. Goana dupa search-ul de aur, editia 2008 (1) | MyKinda Tech si Gadgets Thursday, January 10, 2008

    [...] de radio din rezultate, posturi pe care le poti adauga pe blogul personal, si IMEEM vor face acelasi lucru, dovedind inca o data (daca mai era nevoie) ca modelul vechi de impartire a banilor in industria [...]

  7. Fintsomsnus – Jonathan Forster’s Blog » Blog Archive » links for 2008-01-15 Tuesday, January 15, 2008

    [...] Jango and Seeqpod Hope to Monetize Music – GigaOM Online music discovery and sharing sites are a dime a dozen, but they still continue to launch. For those watching this phenomenon and wondering why new startups keep entering a crowded — and relatively unprofitable — market, look no further than Kasi (tags: music2.0) [...]

  8. Jango and Twitter Rock the House. Why? | Mark Evans Friday, January 18, 2008

    [...] will also make money by selling music and by offering a premium service without ads. (Check out GigaOm, for a post on Jango’s business model, and a look at how other music services are trying to [...]

  9. I just started using Jango – not sure why it took me so long to discover it! It’s pretty amazing how well Jango has done in such a short period of time. What also struck me is why Jango has attracted so many users while similar services have struggled. Here’s what I think:

    http://www.markevanstech.com/2008/01/18/jango-and-twitter-rock-the-house-why/

  10. Why Jango and Seeqpod ? use this site for searching mp3 musics over net. almost every song can be found in this site http://www.seekmp3/info . it’s fast, easy and legal

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