PC World - Site looks to auction music licensing rights

By Izhar Gavish (TheMarker.com)

Sing in the shower, record the new song in your bedroom, sell it on the Web and start driving around in a limousine -- or at least cover your rent. This is the vision of Maor Ezer, one of the founders of the Israeli startup YouLicense.

"YouLicense is a trade platform for marketing intellectual property, specifically the licensing rights to music," Ezer says. "The idea is to enable artists who have not yet signed with record companies to upload their music to a Web site and offer it for sale to commercial bodies. We want to be the eBay of intellectual property."

Ezer founded the company along with his brother, Ohad, a former member of the Israeli band "Selfish Garden," and business partners Tomer Kaplan and Asaf Cohen. Operations are currently split between Israel and England, with Ohad and Cohen working in London while Maor and Kaplan are in Tel Aviv.

The Ezer brothers also maintain an English-language music blog - www.theplugg.com, which employs five American writers. Maor Ezer, a confessed workaholic, also co-founded a cultural Internet portal in Tel Aviv with Kaplan, and along with his three current partners set up a Web site devoted to music covers. Ezer has also worked on marketing campaigns for the Spotback Internet company.

YouLicense's founders now plan to apply all their Internet and music experience to promote their current flagship project.

"We have good connections with artists and bloggers," says Ezer. "In general, I think that today the power has shifted from the press to the bloggers. I believe that bloggers have more marketing power than the media, which costs money."

The main idea behind YouLicense is to connect musicians and commercial entities and companies. Artists who register at the new site can conduct negotiations with potential buyers and sell works to them. There are already similar sites such as www.cdbaby.com that allow independent musicians to sell their music to Web visitors, but most of those sites do not focus on working opposite commercial buyers or big companies.

"If you want to buy a particular song," says Ezer, "you can reach the artist directly through us. You tell the artist exactly what you want to do with his song, and how much you are prepared to pay him. If both parties are in agreement, you close the deal. The actual payment is transacted via PayPal, and we receive 9 percent of the sum.

"I am essentially offering independent artists who are not signed with commercial companies, to generate revenues they never dreamed of," Ezer explains. "One moment before an artist signs a contract with a recording company, I say to him, 'Let's make some money.'" Why would buyers come to him?

"Today, if you want to buy a certain song, you have to apply to the recording company and the publisher who own the rights to the song, and this usually involves a long process of discussions. We let the buyers communicate directly with the artist, conduct shorter negotiations and pay a lower price. In addition, we have created a search engine at the site, allowing buyers to find the content they need. A music editor searching for a specific type of music will find it in one minute [at YouLicense]. I believe that within a month the site will have some 2,000 registered artists from around the world and about 10,000 songs. Within a year, we will have the largest music catalog in the world."

Despite their optimism, Ezer and his partners face some tough slogging against the conservative music industry.

"I realize that I will have to make phone calls to people in the industry, for them to come and see what we have here," says Ezer. "We will need an A&R team to find good music and marketing people who will visit festivals. We want to go to the biggest festivals and represent the artists."

YouLicense is planning to raise capital to finance these promotion activities. "We raised a little money when we first started out, but quickly realized that we need investors to really get off the ground," Ezer says. "Now we want to raise a million dollars or more. We are meeting with a lot of private investors and will soon speak with some of the [venture capital] funds."

At present, YouLicense is in the closed beta stage, with registration by invitation only, and invitations have already been sent to artists. Within six weeks the site should be fully launched, and there are plans for offering other types of intellectual property such as video clips and books. For the first few months, artists will be able to upload music for free, but Ezer does not rule out charging a registration fee in the future, partly for quality control purposes.

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