PeopleSound

Early expansion

By Autumn 1999, Schmitt told the BBC that PeopleSound aimed to "start in the UK and then rapidly setting up subsidiaries in Germany, France, Italy, Spain, the Benelux countries and even Turkey".[10] Aided by grassroots marketing, they had 150 people finding bands across the country.[10]

Quickly becoming a favorite of the dot-com boom, on 29 May 2000, PeopleSound announced a round of funding valuing it in excess of £70 million ($200m in 2022). Investors included Finnish wireless communications operator Sonera Corporation, who took an 8 per cent stake; Ladybird Ventures; and Zouk Ventures, taking a further 2.4 per cent.[11] Under the deal, PeopleSound exclusively became the free music provider for Zed, Sonera's global wireless portal. This integration was the first example of music downloads straight to mobile. Schmitt was quoted as saying "the deal will allow music downloads straight to mobile handsets, enabling music lovers to have their favourite music wherever they go".[12]

Explosive growth

Having positioned itself successfully, by July 2000, the New York Times noted PeopleSound.com was the most popular music platform in Europe, and led European based Internet sites for downloadable music, still "in its infancy".[13][14][15] It had sites in English, German, Dutch, Spanish and Italian,[13] and ranked in the top ten most popular entertainment sites and as one of the highest-profile tech startups in the UK; Les Echos named Schmitt "one of the elite figures of the London Net-economy", while ZDNet declared him "one of the UK's better known Web entrepreneurs".[16][17][18][19][20] It was widely expected to float that summer, reaching a valuation of £100 million.[21][22] Had an IPO gone to plan, it was expected that "even the most junior staff who joined when the company started last year could each make $5 million. Staff joining today would still have made about $160,000 from their share options", and "100 millionaires could be created".[23] Martin Turner, COO, noted that they'd only make inroads into the US after going public, due to the cost of market entry.[24]

By October 2000, the site represented more than 10,000 unsigned bands and artists, holding the master and recording rights to their music, and had over 1.5 million registered users.[25] The company was also named among "The UK's Most Visionary Companies" in 2001 by Management Today.[26]

Other developments

Joint partnerships

PeopleSound first partnered with MTV, becoming jointly branded with MTV in "several hundred thousand pounds worth" of advertising for the V2000 music festival in August 2000.[27] In November 2000, the platform secured distribution deals with Amazon, AltaVista, LineOne, Liberty Surf and intermusic. The deal with Amazon allowed their users to purchase music direct from PeopleSound artists and allowed the platform to scale up their audience.[28]

By September 2000, recording company EMI announced a wide-ranging partnership with PeopleSound.[29] The deal was the first European collaboration of new media and old media and allowed PeopleSound to tap into EMI's global administration for its own artists, sharing ownership of its most popular artists with EMI, and splitting royalties.[29][30]

Music licensing portal

In October 2000, PeopleSound launched a service for marketers to discover and license music for TV, digital and offline advertising. The platform aimed to license music at a quarter the cost and take a fraction of the time the process would usually take, and announced plans to launch a tool to find similar sounding music.[31] Before launching the product, the company was in talks with Microsoft, Casio, Virgin and Smirnoff Vodka.[31][32] Business director Simon Miller noted "ninety per cent of ads want music that fits the brief, which is where we're targeting".[32]

Bubble boom

By June 2001, with tough economic conditions, PeopleSound, with 85 employees, was in merger talks with Vitaminic.[33] The pan-European digital music company, listed on Milan's Nuovo Mercato stock exchange, was interested in PeopleSound, which had nearly sold to Terra Lycos earlier in the year.[34] On 11 June, it was announced Vitaminic was buying PeopleSound for 34 million euros in cash.[35][36][37][38][39] The deal made the joint entity one of the top three largest music platforms on the web and left PeopleSound shareholders with a 19 per cent stake in Vitaminic, the company being one of few post-bubble exits.[40][41][42][43] The deal had sceptics, with Les Echos noting that it was "an unattractive company (Vitaminic) buying a really great company (PeopleSound)"; PeopleSound founder Schmitt told the BBC the deal would "reshape the traditional music industry".[44][45]

The combined acquisition joined archrivals and gave the company a combined catalogue of more than 329,000 tracks and agreements with over 1,200 record labels, with Schmitt telling The Guardian, "Vitaminic is very strong in southern Europe and the US and on the subscriptions side of things we're very strong in northern Europe".[46][47] The combined entity was listed on Milan's Nuovo Mercato stock exchange.[48] By August 2001, and following the internet bubble boom of mid-2000, Schmitt quit to take up a senior role for EMI in New York.[46][49]