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AudioRush.com
Operations

Technology

Broadband access and penetration
To compare the amount of time required to download an album's worth of music (45 minutes) using different technologies, we present below:

28.8Khps 56Kps (ISDN) 400Kps (cable modem)
Full CD (477) Mbytes 36 hours 18 hours 2.6 hours
Compressed CD 32.4 Mbytes 2.5 hours 1.3 hours 11 minutes
Full 5 minute song 53 Mbytes 16 minutes 8.5 minutes 1.2 minutes
Compressed 5 minute song 3.6 Mbytes 16 minutes 8.5 minutes 1.2 minutes
Source: a2b Music available at www.a2b.com (summarized) p>These transmission rates illustrate how arcom's commercial feasibility for online transfer of whole albums increases when consumers have access to faster transmission connections. The combination of audio file compression and greater bandwidth significantly reduces download time for consumers. Rather than 36 hours to download a 45-minute album, a compressed album can be downloaded in 11 minutes using a high-speed connection. According to industry analysts, the global number of broadband access subscribers is expected to rise from 2.35 million in 1999 to 136 million in 2007 (Pioneer Consulting, 1998; see Appendix 1 on page 26). ar.com's strategy is to maintain flexibility to adapt to changing market conditions in both data transmission modalities and file compression software.

Music file compression

The leading technologies in audio file compression currently available are:

Of the dominant formats presented here, the advantage of choosing the Liquid Music System for Audiorush.com is the immediate availability of a complete, copyright-protecting, music publishing system that offers file compression and sound quality fidelity that is superior to the popular MP3.

Site Hosting

ar.com's technological requirements demand minimal capital commitment; they will be out-sourced to Videotron, the leading cable provider in the province of Quebec. Please see the table on page 11 for ar.com's commercial bandwidth requirements.

Bandwidth requirements

1999 2000 2001 2002 2003 2004
CDs downloaded / day 5 18 98 444 1,880 7,430
Gigs/day 0 1 3 13 56 223
kbps 3 12 68 308 1,305 5,160
Cost per month of line $ 400.00 $ 400.00 $ 599.00 $ 1,399.00 $ 1,899.00 $ 3,798.00

Hard drives & writable media

Site Operations

Standard operations for audiorush.com consist of three major facets: updating the site with new information, adding musical content to ar.com's repertoire of products, and distributing such content to online customers. Site updates follow these steps:

  1. New material is actively solicited by the Communications Director, (see the Employees section on page 25)
  2. The material is added with the use of Flash Generator software, which allows for simplified updates through the use of a linked database.

The addition of musical content to the ar.com site consists of:

  1. Artists submitting their music (and cover art, created on their home PCs) to ar.com's submissions department as a digital audio file, or on a conventional CD
  2. ar.com screening musical content for quality and appropriateness (a qualified Artistic Director, see the Employees section on page 25)
  3. Artists signing a digital distribution contract, whereby they earn 50% of the sales price (before shipping) of each full album or individual track
  4. Converting content into a format (Liquid Tracks) that can be played by customers' Liquid Music Player or Real Player using the Liquifier Pro music publisher
  5. Uploading it to our server

The second facet involves distributing content to customers:

  1. Hosting the site through a dedicated server
  2. Providing samples of music which are streamed with the Liquid Music Server software.
  3. Providing this music for purchase via a secured credit card transaction. This is provided by a third party that specializes in this service, iBill see www.ibill.com)
  4. Delivering the selected content from ar.com's server (managed with the Liquid Music Server software)

ar.com will be paying a one-time licensing fee ($30,000) for the use of Liquid Audio's Liquid Music System, a commercial hosting package which includes the Liquifier Pro (copy-protected music publisher), Liquid Music Server (music delivery management software), and the Liquid Music Player (digital audio listening software). The Liquid Music System not only meets ar.com's requirements for efficient, trouble-free software to manage and publish musical data, but also equally offers superior performance and flexibility. The Liquifier Pro is the first professional software that allows ar.com to prepare and publish CD-quality, copy-protected music for purchase and delivery via the Internet to PCs and Macs everywhere. It transcends audio features by providing the capability to include lyrics, credits and artwork - all contained within one file, the Liquid Track. Furthermore, Liquid Audio uses Dolby Digital encoding, resulting in the highest quality audio for streaming and downloading of CD-quality music on the Internet. To ensure audio quality, regardless of different connection speeds, the Liquifier also provides a unique preview capability before publishing to the Liquid Music Server.

Liquid Music Server software monitors traffic on the Internet and ensures smooth delivery to the Liquid Music Player, in the case of streaming audio. The flexible design of the server allows us to send dynamic product and promotional information such as sale price, tour schedule, discounts and coupons; along with the Liquid Track to be played by customers using the freely distributed Liquid Music Player. There is also the possibility of offering effective promotions by freely distributing Liquid Tracks (with the artist's permission) which have an "expiry date" encoded inside. The track expires in a designated period of time, and in so doing provides a link to connect directly to ar.com to make a purchase if desired.

9 Quantum Fireball as quoted on www.egghead.com on April 20, 1999.
AudioRush.com
Table of ContentsAppendices
1. Executive Summary
2. The Opportunity
3. Operations
4. Marketing Plan
5. Industry Analysis
6. Management Team
7. Financials
Technology Dissemination
Industry Information
Curriculum Vitaes
Financials
Media Calendar
audiorush.com web site
Sample Advertisement
Internet Banner
Positioning Map
Sample CD
All information herein is confidential and belongs to AudioRush.com