Muzak Pipes In Data, Advertising As Well as Tunes

TO many people, the word "Muzak" is synonymous with "elevator music," a stream of popular tunes reworked into syruppy instrumentals.

Now Muzak - the company that pioneered the "background music" industry - hopes to rework its image and reshape its products for the 21st century.

The name will stay, however, says director of marketing Leslie Ritter. Muzak's strategy is to grow not only by adding new customers, Ms. Ritter says, but also by providing more services to its 200,000 clients.

"We are creating adjunct services" such as delivering data, advertising, employee training programs, and even news over the same satellite connections that clients use to receive music, Ritter says.

Today the company's 12 stations provide music ranging from country to classical to pop, mostly by original artists.

Yet the most popular channel remains the same: "It used to be called Muzak when Muzak only had one product. We now call it Environmental Music," Ritter explains. This channel is a major investment for the company, since the tunes are arranged and recorded specially for Muzak by musicians on contract.

"We would like to change the overall perception of the general public to include what we actually are today," she adds, noting that no advertising has been done in years (sales work is done by a network of franchise affiliates in the United States and overseas).

The 58-year-old Seattle company was acquired in October from the Field Corporation in Chicago by Muzak management and Centre Capital Investors, an affiliate of Lazard Freres & Co., the New York investment house.

For years, Muzak's product reached clients by private radio signal, a system still used by many of its customers. Since 1988, direct-broadcasting satellite has offered improved reception and given customers the ability to receive several stations with one dish.

This technology has also helped Muzak broaden its business to become a "one-stop shopping" source for a variety of broadcast communications.

In July, Taco Bell began sending data alongside music to its stores.

Information on issues such as pricing and marketing, for example, can be sent from the fast-food chain's headquarters to 1,800 company-owned fast-food outlets. Or Taco Bell can target a message to specific stores.

Dayton Hudson department stores are experimenting with the use of satellite television conferences in which suppliers and sales people talk about specific products.

Muzak also hopes to make a mark in the fast-growing area of point-of-purchase marketing in supermarkets. Much of promotion today involves signs and coupons distributed in stores, or by audio announcements done in-house. Fleming Companies, the nation's second-largest food wholesaler, is developing a nationwide program with its retail customers to combine 20-second audio ads delivered by Muzak with in-store signs and price reductions.

In January, Muzak will start test-marketing a news update broadcast every half hour in several forms: audio, paper printout, and text and graphics on a video screen.

As it targets new products, the company is keeping an eye on its core music business that may face increased competition. Cable companies are offering specialized audio channels, for example.

And then there's "Stimulus Progression," a theory that Muzak has paid attention to for five decades. The music is designed to reach a peak of liveliness at 10 a.m. and 2 p.m., precisely the times when research suggests that workers' productivity is likely to sag.

Muzak also aims to help some restaurants and stores create an ambience in which people will linger - and thus be more likely to make a purchase.