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Electronic Images to USWeb in a $65 million stock deal.
After a public offering and two subsequent mergers for the parent organization,
now known as marchFIRST, Mr. Cardamone has bought his way back out.
He
and business partner Barney Lee put up an undisclosed seven-figure sum for 20
employees and the 40,000-square-foot digital studio and office in the Terminal
Buildings. The operation now will be known as Merging Media Inc., an Internet
content business focused on music, specifically new artists. MarchFIRST holds a
minority interest in Merging Media and will be a customer.
The
deal closes July 1, the anniversary of the sale of Electronic Images.
Mr.
Cardamone said Merging Media will "identify, sign, cultivate, develop,
produce, market and, ultimately, sell" the works of new artists to "an
emerging audience" of net-savvy consumers, with new forms of musical and
"merged media" entertainment experiences. A key market, he said, is
the 79 million baby boomers that he deems as an underserved market in terms of
entertainment needs.
"We
will be a broadband and Internet-centric content company," he said.
"Our core content offering will focus on original music and musical acts.
But as our Merging Media name and business vision imply, we will surround our
musical acts with a video, radio, club and publishing play. And we will surround
all of that with a digital media `services' play."
The
company will provide digital distribution of traditional products like CDs and
tapes to consumers and entertainment venues. Essentially, Merging Media will
make its money by assembling a stable of musicians. Individual shoppers will pay
Merging Media to buy the musicians' work; clubs will pay Merging Media a fee to
broadcast live concerts, taped performances or interviews.
One
of the forums to broadcast concerts by Merging Media artists is Club Cafe, the
South Side nightspot wired for Webcasting -- the process of using streaming
audio and video for Internet transmission, which is under way at fewer than 100
clubs nationwide. Club Cafe is also co-owned by Mr. Lee and Mr. Cardamone.
Mr.
Cardamone said planning for Merging Media has been in the works for months,
though discussions about spinning out began in April.
"I
had three-year education that was unparalleled in my experience," said Mr.
Cardamone. "I wanted to start a new enterprise and to leverage that
knowledge."
The
40-something Mr. Cardamone was a career entrepreneur in Boston and New York in
the 1980s, returned to his hometown in 1987 to create Electronic Images. When it
became part of USWeb, he became the office's managing partner.
USWeb
had less than 200 employees in 1997 and 50 of them came from Electronic Images.
Now, as marchFIRST, it has more than 9,000 employees and is a worldwide presence
with 70 offices and a market capitalization of $3.5 billion. MarchFIRST was
created via the late 1999 merger between USWeb and information technology
consulting firm Whittman-Hart Inc.
"The
Pittsburgh office evolved into the Digital Media Practice Center for USWeb,"
Mr. Cardamone said. "We focused on providing rich media content development
services -- including audio and video, digital photography, print communications
and Internet development services -- to both USWeb's offices and global client
bases, and internally to its corporate and marketing communications
groups."
Once
the USWeb/Whittman-Hart merger was completed in second quarter 2000, the
Pittsburgh office became part of the marchFIRST Global Service Offerings Group.
Since Whittman-Hart already had a Robinson Township office, about two-thirds of
Mr. Cardamone's employees were shifted there from the Terminal Building. He
wanted to concentrate on the music concept and thought the best way to do so was
by spinning out.
Although
there are many original music sites on the Internet -- including iuma.com,
garageband.com, changemusic.com -- "nobody is making much money from
it," observed Jay Green, president of the Downtown sound production company
Big Science and a member of the band tendercrush.
Mr.
Green believes an approach like Merging Media's has a strong shot for success --
with shoppers as well as with talent -- providing that it is streamlined.
Musicians can put their sound onto the Web easily and cheaply, but the bulk of
the offerings are disorganized and overwhelming to all but the most discerning
surfer.
"Most
of what people do -- myself included, sadly to say -- is download music they
can't get anywhere else," he said. "Some of those sites are so indie
and antiestablishment you can't buy the product. I downloaded a kid recording in
a basement in Tempe, Ariz., kicking out some grooves I like, but that's it,
that's all he's got. I'd take more of it but he doesn't have a CD."
He
said tendercrush released its first few songs onto the Internet.
"Thousands
of people have downloaded our music and if it were translatable to dollars, I'd
have a significant royalty check," he said. "But the nature of how
it's organized -- some sites attempt to steer a casual surfer into a purchase,
but it doesn't happen. People take music that's free, listen to it and discard
it. And that's that."
MS.
TASCARELLA may be contacted at ptascarella@amcity.com.
Contact
Marco
Cardamone, MERGING MEDIA, 412/481-7600 or mcardamone@mergingmedia.com.
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