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Giving Web sound and vision

Mar 5, 2001  •  Post A Comment

Age: 36.
Title: Founder, chairman, “Minister of Order and Reason,” Loudeye Technologies.
Founded: 1997.
Location: Seattle.
IPO: March 2000.
Employees: 240.
Martin Tobias may have been ahead of his time when he founded Loudeye Technologies in 1997. But since then, he has ensured Loudeye’s place as one of the largest providers of audio and video encoding for the Internet.
Based in Seattle, Loudeye offers solutions for the digital distribution of audio and video via the Web. The digitally formatted content can be broadcast by customers as sound clips, movie previews, news clips or product demonstrations.
Back when Mr. Tobias established the company, only a fraction of Web sites were using audio and video, and so demand for Loudeye’s services was relatively low.
Today, the digital landscape looks a lot different, especially in the entertainment industry. In just more than three years, Loudeye has assembled an impressive client roster, which includes Universal Music Group, Paramount Pictures, Sony, CNN and Warner Music Group. The company is strategically aligned with major streaming players, including RealNetworks, Microsoft, a2bmusic, Liquid Audio and InterVU.
Said Mr. Tobias: “Digital audio and video will fundamentally change the way we consume entertainment in our home, office and across wireless networks. Now it’s a matter of aligning the right elements, and as the epicenter of the digital media space, Loudeye is prepared to do it.”
Mr. Tobias took Loudeye public in March 2000, just before the stock market lost its appetite for technology companies. The stock price, which reached a high of $54 in the first half of 2000, now trades around $2. Loudeye has yet to make a profit, but Mr. Tobias isn’t worried. His company has cash reserves of $95 million and reduced its quarterly cash burn rate to about $4.5 million by the end of 2000. “Loudeye is … positioned in critical pieces of the backend infrastructure with enough resources to see our bets through to the mass-market adoption of digital media,” he said.
Meanwhile, Mr. Tobias has been credited with Loudeye’s continued progress in cutting its cash burn rate and increasing its revenues. The company’s 2000 revenues were $11.5 million, a 336 percent increase from 1999.
Before starting Loudeye, Mr. Tobias spent six years at Microsoft, where he developed a viable business model for online distribution of software products as part of Microsoft’s U.S. Channel Policies Group. He also helped to develop Microsoft’s volume licensing strategy for selling to large corporations. Before that, Mr. Tobias spent five years as a management consultant at Andersen Consulting. He got a degree in marketing and computer science from Oregon State University.
Johan Liedgren, CEO and founder of Honkworm, an online entertainment company that helps consumer brands develop an online presence, worked with Mr. Tobias when the two were colleagues at Microsoft. Mr. Liedgren is a member of Loudeye’s board of directors.
“Loudeye does all of our encoding for us,” said Mr. Liedgren. “I’m a great believer in the company and in Martin’s business model.”
Mika Salmi, founder and CEO of online entertainment provider AtomFilms, said: “Loudeye has been successful because from the beginning, Martin was able to spot opportunities and move quickly to capitalize on them. No one knew how big the market was when Loudeye started, and not only did they become the dominant player, but they saw other related opportunities and dominated those too.”
Mr. Tobias recently stepped down from his post as Loudeye CEO, and David Bullis, former Loudeye president and chief operating officer, has stepped up to take his place. But 36-year-old Mr. Tobias retains his title as chairman of the company and now holds the company’s “Minister of Order and Reason” moniker as well. Kai Ichikawa, Loudeye’s director of product management, said Mr. Tobias has “been our visionary from the beginning,” he said. “And he certainly keeps us on our toes.”