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Well, it looks like Viacom finally gets it: the Internet isn't a peripheral medium, and in time may prove to be 'the' medium for music entertainment. In May, Viacom acquired SonicNet, a popular, award-winning music news site. Then last month, Viacom formed MTV Interactive (MTVi), which will include MTV.com, VH1.com, and SonicNet.com. SonicNet attracted its core audience through comprehensive coverage of underground music, from British twee to the more obscure subspecies of electronic music. Now it's "being positioned as the universal, or, if you like, umbrella brand," says Nicholas Butterworth, longtime SonicNet impresario and the current CEO of MTVi. In other words, MTVi wants SonicNet to shave the goatee, and become all things to all listeners, a sort of online music emporium where jazz, classical, rock, and pop share equal bandwidth.
Butterworth has been a public figure since he took over the leadership of Rock the Vote in 1993. As SonicNet's head he earned a well- justified reputation for a prescient understanding of technology, savvy marketing skills, and an ability to forge fortuitous relationships with other Internet companies. In the wake of Viacom's acquisition of CBS, Butterworth will head the Internet's most powerful music force this side of the digital revolution. According to Media Metrix, the three sites pulled in over 3 million unique visitors in August. The new company will have its own offices on Astor Place with over 200 employees, and benefit from a promised $300 million in promotion over the next five years. The Voice spoke with Butterworth last week about digital downloads, the music industry consortium known as the Secure Digital Music Initiative (SDMI), and MTVi's plans to become a one-stop shopping mall for the music-listening masses.
Jeff Howe: You're 32. Wow. You're so very much not much older than me. I don't know how to deal with that, but I guess I'll manage.
Nicholas Butterworth: Will that be in the Q&A? [Laughter] How old are you?
I'm 29. Oh, you're just a kid.
So are you. . . . What will happen with the three sites? Is there any merit to the speculation back in May that SonicNet would be folded into MTV and VH1? Well, SonicNet as an organization is definitely being folded into MTVi. And, if anything, SonicNet's entrepreneurial culture is having a very dramatic impact on the culture at MTVi. SonicNet's being repositioned so that it will be an even stronger and broader offering. As the person who has been charged with developing and protecting the SonicNet brand for the last five years, I can honestly say that I think that MTVi is the best thing that ever happened to SonicNet.
What can MTVi do that MTV cannot? Well, MTVi is bringing together a tremendous amount of talent and resources to benefit both VH1 and MTV by delivering a great interactive experience produced by people whose mission is to create great, great online, um, experiences. I think the challenge for us is that we have to make sure that MTV and VH1 get more benefit from MTVi than they would from having their own in-house staff.
I know there was originally a fear at MTV of pushing viewers into a medium that didn't have a real clear revenue model and pushing them away from the tremendously profitable model of the cable channel. As the mediums merge, will MTVi ever replace MTV? We are very focused on adding new experiences for users instead of simply replicating what's on our channels. What we're not doing is taking The Real World and simulcasting it on the Web. We're not interested in taking share away from television.
Do you have plans to move into e-commerce? We think that MTVi has tremendous opportunities to participate in the transition of the entire music business to a digital economy. By Christmas, MTVi will offer secure music for sale over 100 percent of our Web sites. Because of our relationships with both the content owners and the distribution channels, as well as our direct access to the music audience through our TV promotion, we're really in a great position to offer value in the chain. It's also a question of helping artists reach their fans directly. The Internet's a great place for people to buy tickets, a great place for artists to sell merchandise. We definitely plan to do a lot of work to develop those businesses.
At the time that Rolling Stone and CDNow inked a deal to swap their various roles, you said that "magazines don't become retailers." Do you see a concern in a site [like SonicNet] that has been known for its editorial content blurring lines with e-commerce? I think it's a lot easier for broadcasters to add commerce to their online offerings than it is for print publications, if you're asking specifically about magazines. I think SonicNet clearly wants to offer the best music experience, and we believe that in the future and you can see this in a lot of places on the Web now that integrating purchasing and content experiences will be important for music fans. A lot of different people will take different approaches to that initiative, but we think it's critically important from a user's standpoint.