Select Comfort Partners with Fluid Music Canada's Trusonic® to Provide Custom Music Program for Retail Locations
La Jolla company Trusonic uses Internet to provide digital soundtrack for thousands of retail stores and restaurants across the nation
By Kathryn Balint
UNION-TRIBUNE STAFF WRITER
September 16, 2005
When it comes to background music at restaurants, stores and supermarkets, "elevator music" is so yesterday.
So are CDs and tapes.
The digital age is ushering in a new era of retail background music, with a La Jolla startup company called Trusonic at the forefront.
Trusonic, which began five years ago as part of MP3.com, delivers soundtracks and messages over the Internet each day to more than 7,000 businesses nationwide.
The company's digital technology gives stores and restaurants the flexibility to change music on a whim, insert advertising messages and even create their own in-house radio stations.
Rubio's Fresh Mexican Grill uses Trusonic's music to pipe surf, reggae, Caribbean, steel drum and tropical pop songs into its chain of Baja beach-themed eateries.
Spencer Gifts has created its own radio station that plays 20-minute blocks of music with clever names such as "Chunks of Punk," "Metal Mania" and "Jurassic Classics." Employees can suggest songs.
Petco plays advertisements between songs, reminding customers of the company's grooming centers, for example. The San Diego-based chain of pet stores also is considering selling in-store advertising spots to its suppliers.
"It's easy for us to change messages on a dime," said Stuart Broadhead, Petco's director of marketing. "Basically, it's just computer programming that does it."
In-store music and messaging wasn't always such a snap for businesses.
For many years, the soundtracks were sent to stores on tapes or CDs. Later, the music was piped in via satellite. It would take weeks to change playlists and in-store messages.
In most cases, background music is still delivered this way.
MP3.com, a San Diego-based Web site that served as a virtual jukebox for music lovers, sought to change that. The company began sending digital background music over the Internet to music players set up in customers' stores.
Today's iteration of the music player is slightly smaller than a tissue box, with an 80-gigabyte hard drive big enough to hold about 40,000 digital music files. Nightly, the music player connects to the Internet, either over a phone line or a high-speed connection, to download any changes to the playlist or new advertising messages.
Tim Ward, who has programmed background music for 17 years, including for Air Force One in the 1990s, said he knew digital music was the future of the industry.
"I knew businesses would go crazy," said Ward, who joined the MP3.com business venture. "I could now say yes to making overnight changes to the program. For a programmer, it was freedom."
With MP3.com's new Trusonic-brand system, businesses no longer had to rely on employees to play the correct tape or CD for the month, Ward said. Retail chains could tailor songs and advertising messages to a particular store or group of stores. The stores also could easily create custom playlists, complete with radio-style announcements.
The business grew, signing up 3,700 stores and restaurants as customers.
But MP3.com as a whole was struggling after it became embroiled in lawsuits accusing the company of infringing on record labels' copyrights. MP3.com paid an estimated $160 million to resolve the lawsuits before being acquired in 2001 by Vivendi Universal for $372 million in cash and stock.
Within three years, financially strapped Vivendi began disposing of its online music divisions.
Daniel O'Neill, the former chief technology officer of Vivendi's VUNet USA Technologies and vice president of engineering for MP3.com, saw potential in Trusonic.
"It had a good business model and good prospects for the future," O'Neill said.
He enlisted the help of his father's golfing buddy Joseph Tebo, former president of the am/pm International Division of Atlantic Richfield.
In early 2004, Tebo and O'Neill, with the help of a few private investors, bought the assets of Trusonic, including the customer list, the technology and databases with thousands of songs by independent artists.
Over the past year and a half, Tebo and O'Neill have nearly doubled the number of customers and have turned the money-losing MP3.com division into a $3 million-a-year business. Customers include Mervyn's department stores, Islands restaurants and some AMC Theatres.
Trusonic offers three levels of music: independent artists, popular record-label artists and a mix of both. The company pays royalties on the songs played. The dozens of standard playlists offered by Trusonic range from Halloween Horrors (spooky songs and sound effects) to Souled Out (rhythm and blues) to Heartland (country).
But customers also can create their own playlists.
"We have the ability to customize everything for the customer," said Tebo, president and chief executive of Trusonic.
Still, with 7,000 customers, Trusonic is a small player in an industry dominated by Muzak.
Muzak, a privately held company that has been providing background music since 1934 and whose name is almost synonymous with elevator music, delivers soundtracks to 400,000 businesses worldwide.
The next big player in the market is DMX Music, which earlier this year filed for bankruptcy protection and was acquired by THP Capstar for $75 million. Its music can be heard at 180,000 businesses and on 30 airlines.
Both Muzak and DMX have begun offering music background service to customers over the Internet.
"We're slowly bringing it into local markets," Muzak spokeswoman Karen Vigeland said.
Still, most of Muzak's customers continue to receive music on a CD or via satellite, she said.
In an effort to catch up with Muzak and DMX, Trusonic's strategy is to seek business from the roughly 3 million convenience stores, auto-parts companies, gas stations and other stores in the United States that traditionally don't use background music.
Tebo sees that market as ripe for the picking.
"The message is the primary driver," he said. "Convenience stores and service stations haven't had a great need for music because customers spend only a minimal amount of time at the pumps or in the store. But these companies like the idea of broadcasting messages."
Trusonic's emphasis on in-store messaging was bolstered by a survey done this year by Arbitron, a radio and media research company. The survey found that more than 40 percent of shoppers who recalled hearing an in-store audio advertisement made purchases they weren't planning, while 36 percent of them bought a different brand from they originally intended because they were influenced by the message.
"That's a major shift in shopping behavior that's being attributed to this new type of advertising," said Diane Williams, an Arbitron analyst for custom research.
She said that as a result, in-store advertisements could lead to a major change in the way stores market products to shoppers.
"It's a relatively new concept," Williams said. "Now, all of a sudden, advertising spots can be bought like media. Now, you can serve ads from a single location to all of your stores, like you would in network radio."
Kathryn Balint: (619) 293-2848
kathryn.balint@uniontrib.com
