Start-up Finds Its Niche: Finding Bands Over the Internet for Record Companies

Aspiring rockers daydream about a record-company talent scout walking into a nightclub and discovering them. For Transmatic, that moment of discovery came not in a smoky, deafening bar, but in cyberspace.

The rock band recently signed a multimillion-dollar, six-record deal with Virgin Immortal Records, according to its management. Transmatic owes its contract in part to Loudenergy.com, a fledgling Newport Beach online company that seeks out promising bands and pairs them with producers to hone their sound.

While Napster and MP3.com have been helping bands get noticed and sell records over the Internet for years, Loudenergy.com is part of a new breed of online companies eager to go a step further.

Among them:

* Jimmy and Doug’s Farm Club, at https://www.farmclub.com, which was started by Universal Music Group executive Jimmy Iovine. The site invites unsigned artists to upload songs in exchange for critical feedback from Farm Club’s staff and a shot at getting signed by UMG.

* Garageband.com regularly holds contests in which fans log on and vote for their favorite music uploaded to the site. The winning band gets a $250,000 recording contract with Garageband.com.

Stacey Herron, a music industry analyst for Jupiter Research, a New York City-based Internet research firm, said these and other online companies are eagerly tapping into the power of the Internet to do what once took record companies considerable time and frequent flyer miles.

“Instead of having record reps dragging themselves all across the country, sitting in clubs and listening to unknown bands, an exec in Manhattan can sit at their desk, log on and give a new artist a listen without ever leaving their cube,” Herron said.

Eight months ago, Transmatic’s manager uploaded the group’s song “Blind Spot” to Loudenergy.com’s Web site. The company’s executives liked what they heard streaming across the Internet.

Ruben R. Lozano II, the president of Loudenergy.com, sees his site as filling a void in the music industry by focusing on finding new acts for major record labels. His company has contractual partnerships with 40 record producers who help cultivate new talent.

They help Loudenergy.com’s staffers evaluate about 2,500 uploaded songs a month--two or three songs per band--in search of a particular sound or hook that has commercial promise, Lozano said.

“If we like a song, we’ll ask them for some more songs, and if it clicks, we sit down with a band and try to find a producer who would be a good fit for them,” Lozano said.

John Maurer, the bass player for Social Distortion and a Loudenergy.com executive, heard Transmatic’s “Blind Spot” in May and was struck by its radio-ready sound.

That led Loudenergy.com to pair Transmatic with Brad Wood, who has 14 years’ experience as a producer.

Wood, a Loudenergy.com associate who has worked with the Smashing Pumpkins, Liz Phair and other acts, said the wide range of quality music that bands have uploaded to Loudenergy.com has been stunning--from Transmatic’s traditional rock to indie, rap and hip-hop sounds.

“It’s sort of like setting up a net in the woods--you never know what kind of animal is going to come by,” he said.

Lozano said his company hopes to cut deals with two bands each fiscal quarter, with a goal of breaking even next year. Transmatic is the first band Loudenergy.com has helped land a record deal.

Last summer, the band recorded a five-song demo with Wood. Released in the Midwest last fall, the self-titled EP generated raves.

Lead guitarist Zack Baldauf, 20, says he’s been dreaming of a musical career and a shot at stardom since he began playing at age 9. He still lives at home in Lebanon, Ind., where he and his bandmates practice regularly in his father’s barn.

“I’ve never actually lived out of the state of Indiana, and once things start rolling we probably won’t have homes for a while,” he said. “This whole thing is still a little overwhelming.”

Baldauf and his bandmates--lead singer Joey Fingers, 26; drummer Kirk Fredrickson, 30,; and bass player Andy Carrell, 26--have performed together in public only 14 times.

But they’ll get a taste of the road this month when they embark on an 11-show promotional tour across the Midwest as the opening act for the band Tantric. Then they head to Los Angeles to record their first studio album.

Loudenergy.com, which went online in June, derives some of its revenue from advertising on its Web site and profits from the success of the bands it helps develop.

In Transmatic’s case, it owns the band’s initial EP and will share in some of the profits from its first release on Virgin Immortal Records, a division of Virgin Records.