Nettwerk takes artists online with streaming service

A major Canadian record label has signed a one-year contract with a U.S.-based Internet software company to enable users to listen to its artists online for free via streaming technology.

Based in Vancouver, Nettwerk, which has represented artists like Sarah McLachlan, Avril Lavigne and the Barenaked Ladies, signed the deal with Mercora in June. Nettwerk and Mercora had crossed each other’s paths at several trade shows and the IT staff at Nettwerk became interested in what Mercora had to offer after its CEO spoke at a recent conference. Mercora was founded by former McAfee founder, president and CEO, Srivats Sampath. He has been Mercora’s president and CEO since he left McAfee in 2002.

Mercora’s technology allows users to search and listen to thousands of radio channels hosted by other Mercora users, disjockeys and artists around the globe. Mercora has over one million users in 140 countries and over three million unique tracks on its social radio site called IMRadio. “(IMRadio) is like a distributed network where users stream tracks from their own PCs,” said Avikk Ghose, director of business development at Mercora, adding that the company is also Webcasting some of the artists’ Web content on their behalf from its servers in California.

Nettwerk’s general manager Brent Muhle said Mercora’s IMRadio is an interesting model.

“They seem to be relatively successful at it early on,” he said. “It’s a social network and it allows people to experiment with music.”

The deal marks the first record label that Mercora has signed but Ghose said there will be more to come next month.

The concept of social radio isn’t new with other players in the market like AOL Radio and Yahoo Launchcast already providing similar services but, as Ghose points out, it’s more of a social networking site too.

“iTunes is a great service but spending 99 cents on a track for download can be tough when you’re trying to discover new music,” he said. “We like to think of ourselves as a user program version of Yahoo Launchcast with some of the best elements of MySpace.”

When it comes to where music fans choose to discover new artists online, Nettwerk’s Muhle said the record label doesn’t see it as being an either/or situation.

“It’s quite possible that they have Mercora streaming music in the background while they’re surfing the Web on MySpace or YouTube,” he said.

In terms of security, Muhle said Nettwerk doesn’t see Mercora’s service in the same light as threat that peer-to-peer networks pose.

“Basically it’s shared playlists on a network like you would with iTunes,” he said. “People can play music but they don’t necessarily have access to the downloads.”

Instead of seeing digital rights management as a lockdown, Muhle said Nettwerk sees it as an opportunity to see what kind of music fans are listening to in different geographic regions.

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