If you”™re in the 16-to-35 age bracket, you”™re probably aware of the services offered by an obscure ”“ so far ”“ Bethel company that feeds garage-band videos to your cell phone. The company is Global Music International, but those videos are downloaded under the company”™s original name, Independent Music Network (IMN), that began about seven years ago in Manhattan as a cable TV outfit showing ”“ you guessed it ”“ garage-band videos.
Now the company is poised to enter the Chinese market with some of those same videos, along with similar music videos by Chinese garage bands and big-label music videos from Sony BMG Music Entertainment. “We”™re about to jump into the precipice to see if we”™ve got a big enough kite,” said Chris Mauritz, Global”™s executive vice president, director and chief technology officer, of the company”™s giant leap into the Chinese market.
“We”™re already geared up, our systems are in place and are being tested, and we expect a public launch imminently. We”™ve been doing a lot of homework since 2005.”
Global”™s launch of videos and ring tones will reach a potential market of a half-billion mobile phone subscribers in China. “The first deal we”™re doing in China is with their second-largest carrier, China Unicom, which has 146 million subscribers,” he said. “The largest China mobile phone company has more than 300 million subscribers.” That compares with between 50 million and 60 million Sprint and Nextel subscribers in the U.S., he said. “The economics are pretty compelling.”
Not only that, but Chinese mobile phone subscribers use their phones much differently. “There”™s a cultural difference in terms of the value placed on mobile devices,” Mauritz said. “Here in the United States, you use it as a phone.” Or a camera. Or a text messaging device. “In China, ring tones are very popular, instant messaging is very popular and playing games with other people over the phone is very popular.” Not only that, but “they”™re much more inclined to use their phone as a credit card. The average Chinese consumer doesn”™t have a credit card, so it”™s easier to buy things by paying the phone company.”
Buy things like Global”™s garage-band videos and ring tones. “I”™m comfortable that we”™re going to earn substantial revenues in China,” Mauritz said, “But I”™m not comfortable giving figures. It”™s just too new a phenomenon.”
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A fork in the road
Global Music got its start because its founder, James Fallacaro, was frustrated with MTV”™s move away from showing music videos “to kids driving around in a Winnebago or extreme sports,” Mauritz said. “His idea was that there are millions of independent bands looking to get exposure,” he said with a bit of exaggeration on the numbers. “His concept was to do a global advertising campaign with a fairly simple message: Send us your video in any form you can put it together and we”™ll package it into shows and play them on cable television.”
Independent Music Network (www.imntv.com) advertised in major magazines that musicians would read and in several mainstream publications. It even advertised on MTV. “Initially, the videos came in much faster than we could deal with them,” Mauritz said. “Whether they were good, bad or indifferent, we would play them.” Before long IMN was in nine major markets reaching 8 or 9 million households, “which was very good at the time for an unknown new show.”
A few years ago “we were faced with a fork in the road,” he said. “On the television side, we had the option of going to all the major cable operators in the country and convincing them we were a viable premium channel. But the mobile phone networks were just building the infrastructure capability to broadcast video over mobile phones, and people were willing to subscribe to those kinds of services.”
IMN was approached by MobiTV, which had with Sprint created the first virtual network where subscribers could add different channels to their cell phones. “We were the first company to sign up with them as a content provider,” Mauritz said. “That was in 2003, when the whole concept of watching television on a mobile phone was really out there, really ahead of the curve.”
Six months later Sprint and Real Networks asked IMN to provide all the music content for that service, using IMN”™s catalogue of unknown bands, he said. What IMN had that major-label companies didn”™t was a license to stream the garage-band videos over mobile phones. “We were in the catbird seat when it came to the mobile company looking for content,” Mauritz said. “We thought of the mobile universe as a viable universe; the brick-and-mortar record labels looked at it as kind of strange.”
As a result, “we”™ve leapfrogged away from television distribution to mobile distribution of video content,” he said. “We still do independent music, but we”™ve done some deals with large record labels and agreed to create separate channels to broadcast their content. You can still get your son”™s garage band, and a famous artist on another channel.”
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Gearing up
At the end of 2005, Global Music moved from Manhattan to Bethel because both Mauritz and Fallacaro were living in Redding “and we didn”™t like commuting into the city,” Mauritz said. “We”™ve got four permanent people here and a number of freelancers who come in and do the video editing for us,” he said. That doesn”™t include Fallacaro, who with his wife and co-founder moved to Sarasota. Fla., recently. “But most of our people are in China. We have eight people there doing similar things, like video editing and Web content.” (IMN”™s Web site is in both English and Chinese.)
And while Mauritz is a bit iffy about revenue projections for the company, “we”™re gearing up in Bethel and over the next six to 12 months I can see us doubling or tripling to 15 or 20 people, somewhere along those lines,” he said. “We”™re a very small company with a very international reach.”
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