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VandIP: More than just a song

By Bridget Carey

McClatchy Newspapers

MIAMI — The team at VandIP are out to revolutionize the online smiley.

Miami-based VandIP, which stands for Virtual and Incredible Personalities, is the parent company of The LOL Family. At the site, lolfamily.com, users can design a personalized, three-dimensional animated smiley and then share that character with the world. There are several options, such as saving it as an emoticon on an instant messenger service, turning it into a postcard for a MySpace page, or using it in an e-mail signature.

The Web site is relaunching this month. After the redesign, the company plans to charge users to send the animation to a cell phone.

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VandIP executives say they have signed a five-year, $2 million contract with Universal Music Group to connect these animated smileys with songs downloaded on mobile devices. The idea is to have a smiley caricature of the artist dance on your phone to the rhythm of the song, or perhaps use the smiley as wallpaper.

And in the music industry, offering more than just a song is the biggest motivator to get people to pay for music.

‘Something extra’

"It always seems to come down to something extra," said Eric Garland, chief executive of BigChampagne Online Media Measurement. And ringtones are perceived as something extra because they are a way to personalize a phone.

"You’ve got people who won’t pay 99 cents for a hit, they would rather take it for free," Garland said, and yet that same person will pay $2 or $3 for a few seconds of that song to use it as a ringtone. And because ringtones are so profitable, the music industry is trying to find ways to sell more of them.

The music ringtone market in the United States is predicted to slow down 8 percent this year, dipping to $550 million in sales from $600 million in 2006, according to research from New York-based Broadcast Music Inc. But other research shows that the amount of data downloaded on mobile phones in general will continue to grow globally. Infotainment downloaded on mobile phones is predicted to double between 2007 and 2011, increasing from $32 billion to just more than $64 billion, according to Strategy Analytics.

"It could be the entire ringtone industry reinvented," said Glenn Ballman, an angel investor who got involved as chairman of VandIP in August. Ballman has been the chief executive and chairman of several technology start-ups and said he saw great potential in The LOL Family because of the site’s technology and the founders’ experience in the music industry.

"You don’t see these types of companies come along every day," Ballman said.

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But The LOL Family isn’t just about ringtones and wallpaper.

"The possibilities of these characters are infinite," said Ben Borie, head of business development.

Invested nearly $1 million

Regis Ducatillon and his wife, Shirley Huon-Ducatillon, are the founders of VandIP. They said they have invested close to $1 million in the company, which they started in May 2006.

Aside from making money off mobile downloads, they are working on using the LOL characters in product advertising. For example, a company can have an LOL character, or a brand name can be put on a T-shirt your LOL character can wear.

"Everything is prepared for a viral effect," Borie said.

The company has also partnered with European television station TF1 to license these characters and the technology for other companies to use in marketing.

They have an online store with preset LOL characters and hope to one day have the option to put a self-made LOL character on a T-shirt, hat or coffee mug, or have it be its own toy.

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Although Ducatillon won’t release details, VandIP is also talking with various cell phone carriers to make it easy to share their LOL Family characters with friends on cell phones.

So far, about 15,000 LOL characters have been created, and the site gets about 570 hits a week, Ducatillon said. But if these deals work out, that number will likely skyrocket.

"What we would like to have is a big portal partner, a big mobile phone partner, and nail down four or five large event contracts," Ballman said.

Ducatillon is a musician who has created tracks for commercials and movies, including Scooby Doo and Inspector Gadget. He came to Florida to start his music production company, Sunset Music. He and his wife were not experts in the world of emoticons, but their artistic side fueled the idea. When they moved from France to Florida in 2004, their son Timothy was using an Internet messaging program to keep in touch with his friends in Europe.

Timothy told his parents he thought it would be cool to make his own emoticon characters, and that’s what sparked the idea.

So now Ducatillon creates the music on the LOL Family site, in the hope that this will be a new distribution channel for not only his music but also that of other artists who hope to profit from mobile music downloads.

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