EasyBuyMusic.com, the online music retailer whose operations were officially launched late last year, already features 200,000 titles (the larger music retail stores feature about 20,000 titles), has its network spread in nine cities and has attracted investments from the likes of Arthur Andersen, Channel V, ICICI Ventures and Passionfund. Leveraging relationships with investors to aid both day to day operations as well as strategic planning has, according to Mr George, helped EasyBuyMusic more than anything else.

In an in depth interview with eFE, Mr George, Mr Bipin Manuel eVice President (Strategy and Alliances) and Mr Prashant Bahadur eVice President (Marketing) of EasyBuyMusic share their views on how they attracted best of breed investors, the value they bring and the company's plans for the online music market.

Attracting the right investors:
"We always knew that we wanted to attract smart money. Having said that however, every investor feels that he can add value, but what was crucial for us was to determine how this value can translate in terms of day to day operations as well as strategic planning for us" says Mr George. The company took its plan to Consultants Arthur Andersen who took EasyBuyMusic under their fold and played the role of incubator. Arthur Andersen took an equity stake in the company but Mr George does not disclose if there was a capital investment involved at all. "What they did actually was take our concept and turned it into a full fledged business, that was the greatest value add for us" he says. EasyBuyMusic went on to attract an angel investment from Passionfund - an angel fund managed by Mr Mahesh Murthy, former Chief of Channel V and Arun Pai a former consultant with Arthur Andersen. "Both of them brought individual strengths which helped us actually run the company' says Mr George.

`EasyBuyMusic studiously follows the policy of leveraging partnerships'The duo brought skills which ranged from writing ad copy to pricing equity for EasyBuyMusic. The capital investment was largely from ICICI Ventures. The company strove to strike a balance between pure capital investments and pure value addition when picking investors.

*How did they attract the right investors?
"I think the key attraction for the investors lay in the fact that we were addressing an existing market which we were in a position to expand thanks to the Internet. We were not talking of creating a new market as such", says Mr George. Simply put, what EasyBuyMusic aims to do is to cater to the music lover by offering unlimited choice through its online catalogue whilst cutting down on all the costs of an offline music store. "The shelf life of a cassette is 72 days and constant upgradation of inventory is limited by physical space. The cost per unit sale is also very high for a physical store. We eliminate all of these issues by offering catalogues online and supplying music directly from the company to the customer's doorstep" explains Mr Bahadur. This also offers Music companies the opportunity to sell catalogues which translates into added sales for no extra investment.

*Getting the backend in place first helped kickstart the business"We realised right at the start that a Website plus courier company does not make an e-commerce company. We decided to put the backend in place first and launched the Website much later" says Mr George. This also helped the company kickstart parts of the business and start pulling in some revenues even as they went bout building the business. To begin with, EasyBuyMusic tied up with Orange in Mumbai and began to sell their catalogue to the cell phone company's customer base. This database of 1,85,000 people got EasyBuyMusic its first bunch of potential customers. The company got a few delivery boys together and launched the business. The company then got down to chalking out a business process methodology to source and supply music across the country. EasyBuyMusic today has a nine city online network and a full fledged logistics team to deliver music and collect cash.

*Identifying cross selling opportunities through investorsEasyBuyMusic studiously follows the policy of leveraging partnerships so that the Keiretsu model is always in operation. This is demonstrated in the way the company has identified cross selling opportunities with partners and clients of its existing investors. EasyBuyMusic has tied up with Spice Telecom (a client of Arthur Andersen's) in Bangalore to sell music to its customers and Mars Foods (an investee company of ICICI Ventures) in Mumbai. EasyBuyMusic plans to cross sell its products to customers of Mars Foods at their various outlets in Mumbai. With Spice customers, the cell phone company will sell a prestored EasyBuyMusic telephone number through which customers can order music. Moreover, Spice plans a debit card scheme under which EasyBuyMusic will be able to sell its wares. "This helps us reach 1.2 million cell phone subscribers per month which represents a huge direct marketing opportunity" says Mr Manuel.

Consolidating the early mover advantage Through online alliances"We have been leveraging ourselves online through our tie ups" says Mr Manuel, "these tie ups have been with horizontals as well as verticals for whom we serve as the music retail channel" he adds. The company has also initiated its strategy for the digital download era through its tie ups with Listen.com and Liquid Audio. The latter sells the water mark technology which enables the encryption of music files.