WIRED FOR SOUND

By MICHAEL KRANTZ

For six years Phil Rosenthal pursued his rock-'n'-roll dream without much reward. He moved to Los Angeles. He started a Beatlesesque pop band, Twenty Cent Crush, and signed with the tiny label Not Lame Records. He cut a single, Sunday Girl, that was a hit in Finland, of all places. Stateside, however, his band was nowhere.

Then last August, Rosenthal met Joe Seta and Nora Rothrock, proprietors of a site on the World Wide Web called Artists Underground www.aumusic.com) who invited the band to post a sound clip on their Website and participate in a live "computercast" concert. In September, Twenty Cent Crush made its cyberspace debut, playing a gig at L.A.'s Billboard Live that was piped directly onto the Web.

The rest is Net history. Nearly 2,000 rock fans logged on to hear that Billboard Live performance, and now the band is getting airtime in Japan, selling tapes in Boston and taking phone calls from major record labels. "It's incredible!" says Rosenthal. "We've got fan mail from Majorca. I mean, how do you get that?"

Over the Internet, of course. After studiously avoiding the info highway for most of the 1980s, the music industry is getting wired with a vengeance, and that's changing everything: how bands get heard, how performers develop followings, even how music gets distributed. In the past two years thousands of Websites catering to millions of fans have sprung into existence, from tiny one-computer home pages for garage bands in Montana to world-class monster sites like New York City-based N2K www.n2k.com) which offers thousands of titles, stages regular live Netcasts, and announced last week that it had hired legendary rock producer Phil Ramone to create a new, Net-oriented record label. "Music is the perfect resource to digitize," says N2K CEO Larry Rosen. "And the Internet could become the next big distribution medium."

Why the rush online? And why now? Part of the answer is technological. With stereo speakers and built-in CD players, today's multimedia computers have turned into surprisingly good sound systems. Throw in a telephone connection to the Internet, a fast modem and software like RealAudio 3.0 (which lets you hear "stereo-quality" sound in real time, as it downloads), and a world of online music opens up on your computer screen. With a higher-speed connection (via cable modem or isdn line), you can even see music videos and live Netcasts, which, while still pretty herky-jerky, are a decent way to catch a concert if you're a continent away and it isn't carried on MTV.

Part of the appeal of online music is economic. Electronic mail-order houses are one of the few businesses making money on the Web, and music CDs are among the biggest sellers (along with books, flowers and pornography). Buyers get to sample songs before they purchase, and they enjoy modest discounts (typical price: $9.95 a CD); sellers save a fortune on overhead and can carry a much wider selection of performers. Internet Underground Music Archive www.iuma.com) one of the pioneers in the online-music business, got its start peddling the CDs of unsigned bands that nobody had ever heard of. Today the seven-person company carries 1,000 bands (the current favorite: Kaka Pussy), draws more than a quarter of a million hits a day and brings in nearly $1 million a year.

Now the major labels are following suit. When Epic/Immortal Records signed up an alternative band called Korn, the group was so alternative that it counted its blessings when 500 people showed up to hear it. Then Epic decided to promote the band over the Internet. The company opened a Korn page on the Sony Website www.sony.com) It posted bios, concert-tour schedules and daily voice clips from Korn's lead singer, Jonathan Davis, and created a special electronic bulletin board for die-hard Korn fans. Not only has the Website been a big hit ("The Internet traffic is melting us down," says Epic's West Coast general manager Steve Rennie), but record sales have also taken off. Korn's new CD, Life Is Peachy, broke onto Billboard's album chart at No. 3, selling 152,000 in its first two weeks.

The biggest draw for many musicians, however, is the sheer joy of being able to reach a global audience directly. As Rennie puts it, "The Net has returned a measure of control to the artist." Jeff Patterson, co-founder of IUMA, began by digitizing the music of his own band, Ugly Mugs, and posting it on Usenet newsgroups. "If it wasn't for the positive feedback we got, I think we would have stopped right there," he says. "I think a lot of it was that people realized they could distribute their work without going through the record distributors."

Some Internet Underground bands have since signed with major labels, including Euphoria (Island Records) and the Mermen (Mesa/Atlantic). "I see this happening more and more," says Patterson. "My hope and vision are that this will create a middle-class musician. Right now, a band has to become a superstar to make a living. But with Net distribution, any band can get its stuff out and make a profit."

So will Sony and Warner see their record empires crumble? Not for a few more business cycles, at least. According to Jupiter Communications, online-music purchases probably won't exceed $25 million this year--about two-tenths of 1% of the U.S. industry's $12.3 billion total. Even if that number were to grow to 10% by 2000, as Jupiter predicts, most of the revenue is likely to end up in the pockets of the majors. Al Cafaro, president of A&M records, doesn't seem worried about losing Sting or Sheryl Crow anytime soon. "I don't want to say always," he says, "but generally artists want to reach as many people as they can."

If anyone is truly threatened by the rise of the Web, it's the record labels' longtime partners, the retail chains. Right now Web fans still have to make do with tinny RealAudio sound clips. There is no technological barrier, however, to downloading entire albums, in pristine digital quality, onto blank CDs--a prospect the Sam Goody stores of the world view with dread. But that's the way it has always been with rock 'n' roll. One person's dream is another's nightmare.

--Reported by Patrick E. Cole/Los Angeles

With reporting by Patrick E. Cole/Los Angeles