Venture poised to be future 
of music industry

By Regis Behe,  Pittsburgh Tribune-Review

Three years ago, Marco Cardamone struck gold, Information Age-style, when he sold his digital communications company, Electronic Images, to USWeb in a $65 million stock deal.

A fortune in hand, he could have done nothing at all, living the good life after years of hard work building his Internet enterprise.
Instead, the Mt. Lebanon, Allegheny County, native and his business partner, Barney Lee, are trying to forge a new prototype in the music business, a medium that is laden with hazards. Merging Media Inc. is described as a "next-generation, independent music label and entertainment company."

"There's opportunity in this town, it's all over the place," says Lee, who previously owned Aircraft Recording Studios in Dormont. "And what we hope to do is organize that and channel it in some unconventional ways, get it out there in what we feel is the music industry of the future."

Merging Media's components start with The Club Cafe on the South Side of Pittsburgh, at what Cardamone calls the "brick and mortar" level, where musicians perform live shows. The other segments are:

• A traditional music distribution outlet, via CDs and cassettes;

• Distribution of music via the Internet of recordings and live performances that can be downloaded via MP3 or digital format, or purchased as CDs or videos.

• An eventual expansion to live Web casts via streaming audio and video of shows from The Club Cafe.

"The music industry is moving from a product-based to a service-based model," says Cardamone at the company's sprawling headquarters in the Terminal Buildings on the South Side. "We're in a huge sea change - a transformation in that industry."
Cardamone and Lee think they have a grasp of what the next wave will bring. Both music lovers and musicians, their approach is one of cautious optimism, spurred by a shared belief that the climate in Pittsburgh is ripe for their venture.

The plan seems to be a fantastic enterprise. The initial public impression - one Cardamone himself has heard - is that Merging Media is nothing more than a couple of guys with money to burn frivolously, a toy, if you will, for high-tech geeks.

"Well, I don't think we have lots of money," Cardamone says, smiling. "But that's not the issue. The issue is, it doesn't matter how much money we have. We're out to make a business of this, or not. This will stand as a business. It's not a vanity play for a bunch of rich guys. It's not guys who love music and are going to dump a bunch of dough on it."

However they are perceived, it's evident Cardamone and Lee are guys with vision, experience and financial wherewithal. If Merging Media fails to reach its goal of becoming a profitable business - and both men acknowledge the venture could fail - it won't be for a lack of effort and knowledge.

THE CONCEPTION

Cardamone and Lee both were born in Mt. Lebanon, but didn't meet until the mid-1980s, when Cardamone moved back to the area after living in New York City for 10 years. With his wife, Paula, he sought a studio to produce a musical project. After a couple of meetings that didn't pan out, he ended up at Lee's facility in Dormont.

"We got locked in and recognized the similarities in not only our background and being from Mt. Lebanon, but with a lot of the music," Lee says. "Just our philosophies in general about life."

Behind the glass at Aircraft, Lee produced 35 albums, working with an A-list of Pittsburgh bands and musicians including Corbin/Hanner, The Clarks, Bill Deasy, Joe Grushecky, Billy Price and Shari Richards. Many of the artists also did voice work in national commercials he produced.

But working with Cardamone and his wife provided Lee with a link to other ventures. For Electronic Images, he began doing audio work for conventions and commercials for Cardamone's business clients. Together, they built a state-of-the-art studio at the firm's 40,000-square-foot offices at the Terminal Buildings.

Now, Cardamone and Lee have combined their love of music with business. They think Pittsburgh is underserved or ignored by national record and distribution companies, despite roots that extend back to Stephen Foster and jazz legends such as Art Blakey and Errol Garner.

"One of the questions everyone asks is why Pittsburgh as opposed to L.A. or New York or Nashville," Cardamone says. "The answer is, there's some incredible talent here. Our sense is that talent doesn't know any geography."

EMERGENCE

Merging Media kept a low profile until recently, when it released Karl Mullen's album, "Mercy Me With Curses." Although the company seemed to arise overnight, more than two years were spent researching and developing the concept of a music provider with a multi-channel, multi-product approach.

"We found lots and lots of people trying to take that artist-to-audience approach," Cardamone says. "Some of them being artists themselves just trying to leverage the Internet, some of them being people who dropped out of the traditional music industry and started their own Internet companies. We found pieces of what we are doing, but no one who had all the pieces."

Don Marinelli, co-director of the Entertainment Technology Center at Carnegie Mellon University, says the concept in spirit reminds him of one of rock 'n' roll's legendary promoters.

"It's as if Bill Graham, when he was alive, if you were able to tune in via the Internet to one of his shows at the Fillmore East or West," Marinelli says. "Then you get a CD of the concert you've just seen with an extremely fast turnaround, or see the performance from the comfort of your home or while you're on vacation or on business in Seattle."

One of the important things Merging Media is doing, he says, is creating new content that takes advantage of the Internet's capabilities.

Lawrence Eakin, technology director of investment research for Rockhaven Asset Management, a Pittsburgh-based mutual fund boutique, says Merging Media's concept is solid as a balanced business model. However, many Internet companies are offering music or music-based products via the Web. If the company wants to thrive as an Internet-based provider of content, he thinks Merging Media will have to be savvy and partner with an established Web presence.

"Yahoo! was a firm that first developed a cult following, then grew larger, but it's hard to do that on your own," Eakin says. "If they can do that, then perhaps partner with a big media company to attract people to their site, they have a chance at succeeding."

THE ART OF MUSIC

Karl Mullen has been a musician in Pittsburgh for almost 25 years. During that time he's heard schemes and marketing plans from sundry types of music promoters. What attracted him to Merging Media was different than the usual sales pitch of dollar signs and glorious promises.

"Anybody can have capital. They have capital and smarts," Mullen says of Cardamone and Lee. "It's the smarts that are most attractive to us, because capital comes and goes. Those guys have a vision, and they've been successful in virtually everything they've done. I don't see them not being successful in this venture either."

For Mullen's album, Merging Media spared no expense, hiring noted Irish producer Kevin Moloney, who previously worked with U2, Sinead O'Connor and The Chieftains. Moloney, who was in town two weeks ago for the launch of "Mercy Me With Curses," says he was attracted to the project in part by Merging Media's commitment and integrity of vision even as Cardamone and Lee made it clear they are interested in making a profit.

"They're not trying to commercialize the music by turning it into Velveeta cheese or something," Moloney says. "They want to keep everything as an original, organic product, not blurring all the edges, trying to make everything silky and glossy. They will be behind the artists as a driving force, and won't try to change them or lead them into a different marketplace they shouldn't be in."

Mullen's debut effort, Moloney's presence and the recent media attention Merging Media has attracted have not gone unnoticed. Cardamone and Lee have been deluged with tapes and inquiries from local musicians and bands. Everyone, it seems, wants to hop on board.

But Cardamone, although flattered by the attention and interest, says the company will stick to its intended model of slow-but-steady artist development and growth.

"There is the art of music, which is the thing that attracts all of us to music. And then there is the commerce of music," Cardamone says, "which has to do with marketing and selling of music. ... You need both to build a successful music media and entertainment company. I like to refer to it as a-commerce as opposed to e-commerce."

FULL HOUSE

On a recent Friday night, The Club Cafe was packed to capacity for a show featuring musician John Doe, formerly of the seminal punk band X. During his performance, Doe expressed his gratitude and surprise to the audience for attending, noting that he wasn't sure what kind of response he'd get playing a solo acoustic show.

It's a scene that Cardamone and Lee undoubtedly envisioned when they began their dream more than two years ago: a full house, a grateful performer, and an evening of invigorating entertainment. Because of the cutting-edge recording and broadcasting facilities at The Club Cafe, they've been able to book performers such as Doe and Jules Shear. Other national acts, they say, also are interested.

But the next piece of the Merging Media puzzle - the Webcasting of live events - might take awhile, perhaps 18 months, until it becomes a regular feature.

"We want to move quietly because we've watched a lot of people take live performances and stream them to the Web, and they've been pretty bad experiences," Cardamone says. "Some people think it's great to get crazy publicity around a bad experience, but we want to do this the right way."

The market, Cardamone adds, is not yet ready for this advancement, with high-bandwidth DSLs and cable modem access having not quite reached market-level saturation. Merging Media, he says, is content to wait until the right moment, then seize the opportunity.

He and Lee, Cardamone notes, have been in this situation before with Electronic Images. It's as simple as that old Kenny Rogers song, "The Gambler": "You've got to know when to hold 'em, and know when to fold 'em." The Internet's bubble has burst, collapsed and new Web ventures will undoubtedly be more problematic.

"We were a part of a very huge, cresting curve, and we just got out in time," says Lee, referring to the sale of Electronic Images.

Now, with the Internet tide at low ebb, success for Merging Media might just have to be measured one wave and one band at a time.

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