MetroLyrics acquisition by CBS Interactive a high note for Canada's new media

Article content

It started as a way for then 16-year old Milun Tesovic to earn enough money to buy a car.

Ten years later Metro Vancouver’s MetroLyrics, the world’s largest online lyrics web site and the third largest site among all music web sites, has been acquired by the CBS Interactive Music Group in a deal that will see MetroLyrics double the CBS Group’s online traffic and integrate it with that company’s popular online music sites Last.fm, Radio.com and MP3.com.

Details of the recently announced  acquisition of  the privately held MetroLyrics have not been disclosed but no doubt the now 26-year Tesovic, who co-founded MetroLyrics with Alan Juristovski, could buy just about any car he wants.

“This is one of the bigger Canadian acquisitions in the new media space,” said Tesovic.

While the co-founders declined to disclose the purchase price or their company’s revenue, Tesovic said brands pay the company millions of dollars a year to reach MetroLyrics’ audience. And in turn MetroLyrics contributes millions of dollars to music copyright holders through royalty payments.

However, buying a car is not on the agenda for the Simon Fraser University student who is soon to graduate with a Bachelor of Business Administration in Entrepreneurship. Instead Tesovic and Juristovski, a 2001 grad of SFU’s executive MBA, are focusing on business as usual at the Burnaby company where MetroLyics’ 12 employees will continue to work under the CBS umbrella.

“The very next step is seeing how we can take MetroLyrics to the next level,” said Tesovic. “We want to make it the best brand we can,  we want to make this a great success for CBS.
“We want to show what Vancouver can do in a market that is usually saturated by the Bay area.”

By any measure MetroLyrics has already been a resounding success, growing from the initial online music database that Tesovic created when he concluded that his talents and interests could earn him more money with an online venture than any highschool job. The idea for a lyrics site was born when he discovered that ‘song lyrics’ was one of the most popular search terms on the Internet, while there was little in the way of consumer offerings to address the demand.

“Unfortunately when you are in highschool and working part time, even making an unheard of $15 an hour, it would take forever to buy a car,” said Tesovic. “I thought why not combine my interest and my skills and go online where nobody knows how old you are.”

Born in the Sarajevo, Bosnia when it was still part of the former Yugloslavia, Tesovic emigrated to Canada with his father, mother and sister, leaving their war-torn home in 1994.

“I’ve always been motivated, coming from a Third World country,” said Tesovic. “When we emigrated to Canada we didn’t have any money, we pretty much came with our clothes and a backpack.”

MetroLyrics is the most comprehensive database of legal music lyrics in the world, with more than 700,000 songs and more than double the traffic of the next largest lyrics site. A 2008 partnership with licensing aggregator Gracenote allows MetroLyrics to pay royalties to artists for all the lyrics that it displays.

According to comScore’s August stats, MetroLyrics has more than 25 million unique users a month with almost half of those in the United States. Tesovic and Juristovski say Google analytics for the site show it currently has 45 million unique visitors and 126 million page views a month. The web site is also a thriving social media music site with more than one million registered users, doing everything chatting about their favourite music, to rating albums and artists.

“We’re the largest lyric web site by far,” said Tesovic. “To give you an idea of how big, with CBS, we more than doubled their traffic by joining their team.”

Success was also reflected on the balance sheet, with MetroLyrics managing to launch and grow these past 10 years with no outside funding and not so much as a line of credit,. It makes money not by charging users but through the sale of advertising, ringtones and virtual goods.

“Even before the acquisition we were a very profitable company,” said Juristovski. “It is a very successful BC story.”

The co-founders say the acquisition brings value to both sides.

“It is good news for everybody,” said Juristovski. “It is good news for MetroLyrics, it is good news for CBS.

“For the time being the company is staying in Vancouver and operating from this location,” he said of MetroLyrics’ Burnaby headquarters. “We will be putting more focus on innovation in the lyric space.

“We are quite excited about it.”

Juristovski and Tesovic said the acquisition allows for an integration of the online music brands in a way that wouldn’t be possible if they weren’t owned by the same company.

“This is beautiful for MetroLyrics and for music lovers,” said Juristovski. “CBS is a well-positioned player in the music space with more resources than MetroLyrics for sure.
“We can really integrate our offerings. From a strategic standpoint that is very difficult to achieve unless you are managed by the same company.

“It is a benefit to us. One is the financial resources and the other is the strategic situation with the other properties, each one a leader in their space.”