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Riffage's Strategy Combines Online and Offline Resources.

Riffage's (www.riffage.com) goal is to create an ecosystem to support emerging musicians, according to the vice president of marketing, Page Murray. Riffage is not only an online music destination, but it also owns a record label and concert venue - The Great American Music Hall in San Francisco. Because its business spans the online and offline worlds, the company is able to generate revenue from several sources - atypical for web-based businesses- such as ticket sales at their venue, as well as making use of its website to create a powerful A&R and marketing tool.

Riffage strives to help musicians further their careers at every stage of the game. Aspiring musicians can create their own page on Riffage's site, with the provision that they must provide at least one free MP3 for download. Riffage then monitor's the response data. Riffage's ability to gather and track the response each musician receives, gives it an advantage over traditional records labels. A highly trafficked page will spark the attention of Riffage, and the musician or group may be considered for an appearance at the Great American Music Hall and perhaps, even a record deal.

Riffage also provides an opportunity for musicians to sell their CDs, T-shirts and other goods through their profile page. Eighty-five percent of the revenue from these sales goes straight to the musician. According to Murray, such a small percentage of Riffage's revenue is derived from e-commerce that the company felt it did not need to tax musicians heavily on the percentage. In addition, the goods orders are fulfilled in a warehouse on the Navaho Nation in Loop, Arizona, allowing the company the opportunity to help alleviate unemployment in that corner of the world.

"Part of music has always been social consciousness," stated Murray.

Riffage, which purchased 1500 records from A&M Records in July, has signed 4 bands to its new label, including Ugly Duckling, a hip-hop group, and the Electric Daisy Carnival, an electronic trance compilation recorded at a famous desert rave.

Riffage is always seeking to point people in the direction of new music they would like, and directly test the market potential of new musicians. In addition to music from indie artists, Riffage purchased a license from the Universal Music Group and BMG labels. Riffage recently announced a new section on its home page called "Riffage Spotlight", and will be using this section to link indie artists with the well-known artists that inspired them. During its frequent webcasts from the Great American Music Hall, Riffage also links to unknown bands that compliment those performing.

Riffage's business model looks at music as a system composed of several interconnected and complimentary parts, according to Murray. Although less organic, another site which was founded upon a similar idea is Jimmy and Doug's Farmclub.com (www.farmclub.com), founded in 1999, by Jimmy Iovine, co-chairman of Interscope Geffen A&M, and Doug Morris, chairman and chief executive officer of Universal Music Group. Farmclub.com also pairs unknown artists with well-known, signed artists, and integrates a cable television show with its website. The key to these sites success, however, seems to be in the combination of online and offline resources to introduce new music to the public.

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