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Ripping Service Eyes A/V, Custom Channels

11/22/2004 02:00:00 AM Eastern

Startup Ready To Play, which converts consumers' CDs into compressed-music formats, plans to sell its service through A/V specialty and custom-installation channels largely bypassed by competing services, founder and CEO Jeff Tedesco said.

Under the program, Ready To Play loads consumers' discs onto a player, hard disc drive (HDD) music server, DVD-ROM or external HDD.

Cambridge SoundWorks is the first retailer to sell the service.

The service will appeal to an older, time-starved demographic that shops at national and regional A/V specialists, which have begun to market compressed-music portables more aggressively, Tedesco said.

For custom installers that transfer CD music to music servers as a customer service, Ready To Play will free up employees' time to sell and install more distributed-audio systems, he continued.

Both distribution channels are largely untapped, Tedesco said. “We will be the first CD-conversion service available through retail stores,” Tedesco claimed. A handful of conversion services target consumers directly through their Web sites, and they focus on portable users, he and other marketers pointed out.

Through custom installers, he continued, only one music-server marketer, ReQuest, loads consumers' CD libraries onto its products as a service to installers and installers' customers. Companies that use the Web to sell their services directly to consumers target only portable users, he noted.

The new program marks a directional change for the company, which has offered its service direct only to portable owners and only through its Web site.

In the A/V specialty channel, Tedecso expects some dealers to co-brand the service and market hardware/service bundles that combine the cost of an HDD portable with ripping service for a predetermined number of discs. In this scenario, consumers would drop off their CD libraries at the store, which would ship them to Tedesco's company. Ready To Play would be able to rip about 200 discs within one to two days of receipt, he said. During peak gift-giving seasons, when Ready To Play could get backlogged, retailers could opt to include a service coupon in their bundled products, he said.

Some retailers might also opt simply to refer their customers to Ready To Play without becoming a drop-off point for discs. In that case, dealers would receive a royalty for each referral rather than make a margin on the sale, Tedesco said.

“Our target is the 35- to 55-year-old who has been collected CDs since 1987, has 200 to 400 CDs and needs technology hand holding,” Tedesco said. “Our target demographic is not the 19- to 30-year-old.” Target consumers are going to A/V specialty stores for home theater, and they don't have the time to rip, he said. “With 200 CDs, it takes two to three hours every night for a couple of weeks, easily.” These customers are also “hesitant to send their discs cross-country to a Web site. They want a regional or local trusted brand,” he added.

Tedesco established a $1.10 suggested retail per disc but didn't reveal expected dealer margins.

For installers, Tedesco adds a one-time setup fee because of the added time it takes to transfer music to HDD music servers. Most music servers use Linux, whose ripping technology is slow, Tedesco said. “It can be 20 to 25 minutes to load an album on a server vs. six to eight minutes on a consumer's [Windows-based] PC,” he explained. The fee will include shipping and clear binders that consumers can use to replace their jewel boxes.

Later this year, Ready To Play will announce more partnerships with A/V dealers for portables and manufacturers for HDD music servers. “We'll get the [server] manufacturers' endorsement and work directly with their installers,” Tedesco said. “We will be the outsourcing provider for the custom installer. We'll get the unit and the CDs.”

Installers who offer their own ripping service currently charge from $2 to $5 per disc, more than Tedesco's suggested $1.10 per disc, but the company expects installers to jump at the outsourcing opportunity so they can free up stretched resources to do more selling and installing, he said.

Ready To Play supports all the big compressed-music formats, including WMA, MP3, Flac and Ogg Vorbis. The company also contends its ID tagging will be more thorough and accurate than competitors'. The company accesses the CDDB and FreeDB databases and an internally generated database, generating more “hits,” increasing the accuracy of metadata, and lowering the chances for misspelled names and words to be downloaded, he said. CDDB and FreeDB users, some of them prone to misspelling, contribute to those companies' databases, Tedesco noted. Ready To Play helps weed out those misspellings by crosschecking three databases.

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