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Olive Media Expands Music-Player Marketing

San Francisco – Olive Media Products is using capital from a recent investment by IDG Ventures to step up U.S. marketing efforts, expand worldwide distribution and expand its selection of audiophile-targeted hard-drive music players/servers.

The company began offering its first Opus Hi-Fi Digital Stereo in 2005 directly to consumers via its own Web site and through a toll-free number. Olive also added U.S. distribution through Amazon, which displays Olive product information and links consumers to Olive’s site to place an order. Outside the U.S., the company added select international distributors in a handful of countries.

Now, the company is hiring more employees, ramping up its U.S. marketing efforts, signing up more international distributor, and planning to add additional online retailers in the U.S., said Oliver Bergmann, CEO and cofounder. “We were cash-flow positive,” Bergmann said, “but we needed additional capital to hire people and expand.”

In the U.S., newly hired senior VP Beth Gumm will plan the company’s marketing strategy, which will be expanded to include direct mail, more on-line advertising, an expanded public relations effort, and more online retailers. Gumm previously was direct marketing and ecommerce senior VP at Williams-Sonoma, where she supported all of the company’s brands.

Outside the U.S., the company has already expanded its distribution to 20 countries and is on the way by year’s end to sell into 30 countries. Outside the U.S., Olive does not sell direct to consumers. Instead, it sells through brick-and-mortar retailers, including audio retailers and design stores, and it plans to offer its products through Amazon in Europe.

Through its distribution channels, Olive is offering its next-generation Opus music server, which features hard drive, CD player/recorder, and connections to an audio system for local playback. The server, however, also streams music via wireless Wi-Fi and wired Ethernet network throughout the house to clients, which in turn connect to A/V systems. Olive’s Linux-based component-style device doesn’t store pictures or video.

The latest server, Opus No. 4, is available in three memory capacities. The capacities are 500GB at $1,499, 1TB at $1,599 and a new capacity of 2TB at $1,799, enabling storage of up to 6,000 CDs in the default codec of lossless 24-bit FLAC, the company said. Consumers can rip their own CDs one at a time through Opus’s front-panel CD slot at a rate of six minutes per disc, but Olive offers a preloading service that rips and stores 50 CDs per hour. The first 100 discs are free, and prices after that scale down to 50 cents per disc.

The device features 4.3-inch touchscreen on its angled-up front panel, two-second wake-up time, and Internet-radio streaming that doesn’t require a booted-up networked PC. It streams up to more than 20 different songs to more than 20 different $599 clients via wired Ethernet. Via wireless, it streams up to 12 different songs simultaneously to 12 clients via wireless. The clients also feature a touchscreen, but because they lack amplifiers and speakers, they’re intended for connection to existing home audio systems.

The server and clients are available in silver or black aluminum.

Because Opus is also a CD-recorder, it burns custom-made playlists to recordable music CDs in PCM format for playback in any CD player. It also burns music to data discs in MP3, AAC, WMA and FLAC formats.

Most Olive customers are convenience-minded baby boomers who own 500 to 1,000 CDs, are familiar with CD players, appreciate the fidelity of CDs, and continue to buy CDs, Gumm said. For people who prefer to use a PC to store ripped CDs, the Opus and clients feature Microsoft universal plug-and-play to connect to similarly equipped network PCs and network-attached storage devices.

In the U.S., about 15 to 20 percent of Opus buyers purchase a client at the time of the Opus purchase or within about six months, said Bergmann.