CDuctive, an online music retailer, allows shoppers to customize CDs. Also, several shorter articles about companies that provide mass customization of blue jeans and shoes.
Upstarts: New-Biz Watch
Hip aficionados of dance-club tunes cut CDs by computer and sell them on-line
Belgies Anan loves music, especially an avant-garde style known as acid jazz. When the 30-year-old account manager craves a CD by a group like the Brand New Heavies or Jamiroquai, she hoofs it from her apartment in New York City to a store and pays as much as $25 for a disc. But last winter she hit upon another way to shop.
Anan logged on to the Web site of CDuctive, an on-line music retailer. When she clicked on a category marked "Acid Jazz," her computer screen displayed 30 titles. Anan sampled 45-second snatches of several songs and, with a few keystrokes, ordered a $21 compact disc. "With CDuctive," she recalls, "it was so easy." And Anan liked another CDuctive feature: she could customize a CD of any assortment of songs according to her personal taste. On the disc she ordered, she specified 12 songs by recording artists like DJ Food and 9 Lazy 9, songs that ordinarily would have cost her a lot more money if she had bought all the CDs on which they appear.
CDuctive's headquarters is in the hip TriBeCa area of lower Manhattan, not far from Anan's apartment. Two of CDuctive's founders, 29-year-old Thomas Ryan and 30-year-old John Rigos, work in its loft-style offices there. But neither Ryan nor Rigos fills the orders that, like Anan's, zip in from all over the world. The two men don't have to. The process is completely automated: high-powered computers retrieve digitized songs stored on hard drives and burn them onto blank discs.
CDuctive, which opened for business in January, is one of about a half-dozen start-ups joining a rush toward CD customization on-line. Their niche represents only a tiny slice of a phenomenon known as mass customization--a trend among companies applying sophisticated technology to produce unique goods, ranging from shoes to vitamins, to match a single customer's order. And the new wave is here to stay, predicts B. Joseph Pine II, author of Mass Customization: The New Frontier in Business Competition.
Already, music lovers are spending large sums on-line ordering mostly noncustomized CDs and other recordings--an amount estimated at $70 million in 1997 and projected to balloon to $1.6 billion in 2002. Numbers like those quicken the pulse of Ryan and Rigos, who dreamed up CDuctive with a third founder, Alan Manuel, 29, two years ago. All three were then business-school students and dance-club regulars in France. Each chipped in $25,000 in seed capital, which was augmented with $50,000 more from family and friends.
Reflecting the founders' own tastes, CDuctive's repertoire of 10,000 titles is limited to a modern beat. The company's competitors in the increasingly crowded on-line market sport names like SuperSonic Boom and Custom Revolutions Inc. Yet Ryan says CDuctive enjoys an edge because of the exclusive licensing agreements it has signed with more than 50 independent record labels. As part of the deal, CDuctive will also promote and sell on its Web site full-length recordings of its partners.
To sell music CDs is to swim in a huge ocean. CDuctive must compete with sharks like Music Boulevard and CDnow Inc., on-line companies that offer thousands of recordings from Sony, Warner Bros., and other major labels. Then there are the whales: giant retail stores like Tower Records that stock the most popular tunes. By contrast, the listings of the companies selling customized CDs comprise limited, often obscure offerings, says Billboard magazine writer Doug Reece. The major labels refuse to license CDuctive and others selling customized CDs, fearing customers will "cherry-pick" hits instead of purchasing whole albums, explains Reece.
But CDuctive has an edge over many of its competitors, partly because it has no expensive inventory to maintain. The company expects revenues to hit $300,000 this year--and to jump to $12 million by 2002. If that sum sounds optimistic, the mood at the CDuctive warehouse is decidedly upbeat--literally. Ryan and Rigos pay continual tribute to the music they're selling, blasting themselves 14 hours a day with the sounds of their own pulsating dance-club tunes.
Toffler: Change--or Else
One sharp-eyed observer who spotted the coming of mass customization long ago is perhaps the nation's best-known futurist, Alvin Toffler.
As far back as 1970, Toffler wrote in Future Shock about "destandardized" goods and services that he forecast the United States would produce in the "greatest variety." In The Third Wave, a decade later, he coined a new term: "the de-massification" of production, adding that "we are racing toward machine customization." In Powershift: Knowledge, Wealth, and Violence at the Edge of the 21st Century, published in 1990, Toffler described the trend as "standing the principle of mass production on its head."
How far does Toffler believe the shift will ultimately go?
Speaking recently to Inc. by telephone from his California home, the 69-year-old Toffler replied that mass customization will proceed with a kind of gravitational force because, as Americans have become more affluent, "we have wanted greater individuality, and we can afford it, partly because technology makes it cheaper."
Pressed to define the implications, he answered, "I'd say if you have a company and you're not moving toward automation on demand, you'll have a competitor one day soon who will put you out of business."
Jeans Made in Heaven: Earthly Fit
Jeans are supposed to be the most comfortable pants in the world, but they're not for me. I've never found a pair that was truly comfortable and flattering. So I jumped at the chance to order a pair of custom-fitted jeans. And I thought I had found an easy way to do it through InterActive Custom Clothes Co.'s Web site. Once I zapped my instructions to the whiz-bang computer of the two-year-old company, based in Greenwich, Conn., it would relay the order to the cutters that it has on contract, and I'd have my jeans in no time.
