Spokane Journal of Business

Spokane’s Crows Nest inks deal with MP3.com

Audio-video integrator to join in national rollout of business music service

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Crows Nest Entertainment Inc., of Spokane, has signed a pact with San Diego-based MP3.com Inc. through which it will begin selling and installing a new Web-based business music and advertising delivery service nationwide.

Pat Stimpson, executive vice president of Crows Nest, says the agreement represents an important piece of new business for the 7-year-old, audio-video systems-integration company, which has offices here and in Bellevue.

Its substantial because it gives us a music product to take to the national-account marketplace, he says.

Through the new Web-based business music service, which just now is being rolled out, customers can create and schedule customized music play lists from a wide variety of selections and genres found on the MP3.com Web site, or they can have companies such as Crows Nest do it for them.

Play lists are managed on the Internet from a password-protected account, allowing business customers the flexibility of programming specific music choices on a minute-by-minute basis for each of their stores or offices. The proprietary MP3.com system also allows precise scheduling of targeted audio advertisements, Stimpson says. Programming changes can be made easily at the MP3.com Web site, and those changes can be downloaded automatically each night during off-hours to businesses on-premise MP3.com computer servers, he says.

The new Web-based service is expected to compete with satellite- and cable-based music systems for business customers.

Bob Simril, MP3.coms vice president of business music services, says, Industry contacts and extensive experience at managing audio systems for national retailers make Crows Nest Entertainment an ideal partner for our business music endeavors.

Stimpson, of Crows Nest, says the Spokane company expects to derive revenue not only from selling and installing the service, for which it then would receive a monthly fee, but also from managing it for businesses and from providing additional in-store advertising and messaging services. The added value of the messaging part of thiswhich includes vendor- and corporate-sponsored audio ads that are played in the storesis where it makes such a great fit for us, he says.

Crows Nest is one of a small handful of five to seven value-added resellers around the country with which MP3.com has signed agreements so far to help it launch the system on a broad scale, Stimpson says. Those resellers pay a monthly licensing fee to MP3.com, per location, and collect as revenue whatever they can charge on top of that fee. MP3.com also derives substantial revenue from advertising sold for its Web site, Stimpson says.

Our focus is on national business, which is typically retail and hospitality chains with more than 50 locations, he says.

Crows Nest, which currently employs about 10 people here and 10 in Bellevue, expects to be able to handle the additional workload at least for now with its current computer equipment and staff, and will use a national network of sound-system subcontractors to install the necessary equipment, Stimpson says.

The company currently is managing a rollout of the MP3.com system in Petco Animal Supplies Inc. stores nationwide and in a California-based chain of Rubios Baja Grill restaurants, he says.

Crows Nest has designed and installed sound and video systems for such national and regional businesses as Nordstrom, CompUSA, Champs Sports, and TGI Fridays, as well as a host of local clients. It announced last November that it had surpassed $22 million in cumulative sales since its inception in 1994, and its projecting 2001 sales of $6 million to $8 million.

We have grown 30 percent a year for six years, and we expect that to continue, due partly to the newly signed MP3.com agreement and the spin-off work that its expected to generate, Stimpson says.

Crows Nest decided last year to get out of the home-systems business. It had entered that market in 1997 when it acquired the assets of Custom Design Inc., a Redmond, Wash.-based home theater and automation company. Stimpson said the operation didnt turn out to be as profitable for Crows Nest as it had hoped, so Crows Nest sold it back to its former owner last July.

Crows Nest also has de-emphasized another area of its business, the design and installation of video-conferencing systems, so it can devote more resources to pursue national audio-video systems and MP3.com-related work, he says.

MP3.com claims to be the Internets top music service provider. It seeks to provide consumers with anytime, anywhere access to its music collection using any Web-enabled device. Its Web site has more than 750,000 songs and audio files posted from more than 117,000 artists and record labels.

Kim Crompton
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