MP3.com Re-Launches Music Locker Service
After paying what is believed to be well over
$100 million to untangle itself from copyright-infringement
litigation, MP3.com has re-launched the online music-locker service
that got it into legal hot water in the first place.
This time, however, San Diego-based MP3.com has permission
from the world's largest record companies to serve up Web-hosted
copies of tracks already in the personal music collections of
subscribers.
The company's MyMP3.com service was live again today with a few
changes, including the addition of a $49.95-a-year premium
subscription that allows users to catalog the contents of up to 500
CDs and listen to them as streamed audio without having to hear a
host of inserted advertising pitches. The free service allows users
to index the contents of up to 25 CDs and relies on advertising to
generate revenue for MP3.com.
But it could be some time before subscription fees and advertising
make up for the whopping legal tab the company ran up battling the
five major record labels in a New York federal court.
In a lawsuit begun in the spring, Universal, Sony, Time Warner,
BMG, and EMI argued that the music-locker service infringed on
their copyrights because it streamed music from a cache of digital
audio files created from MP3.com's own collection of CDs.
Using MP3.com's "BeamIt" software, subscribers can pop audio CDs
into their PCs and have the same contents made available online. A
subscriber's online library is an index into the MP3.com collection
that mirrors the contents of "beamed" CDs. The approach eliminates
the need to physically copy and upload what can be massive digital-
audio files in MP3 format.
To extract itself from the New York lawsuit, MP3.com reached
settlements widely believed to be worth some $20 million each with
four of the major labels. Seagram-owned Universal refused to
settle, and last month was awarded $53.4 million in damages by the
US District Court Judge handling the case.
Earlier, MP3.com said it had set aside $170 million for settlement
costs. And while the current bill - not counting lawyers' fees - is
apparently smaller than that reserve, the company still faces
lawsuits from some smaller music companies.
In addition, the company will be racking up new expenses every time
MyMP3.com subscribers stream the now-licensed music in their
personal collections.
While MP3.com has not revealed exact details, a pact with the
licensing agency representing music publishers is believed to call
for a royalty payment of a 1.5 cents when a user streams a licensed
track for the first time and one-third of a cent for each
subsequent playback.
The MyMP3.com service re-launched today sports the ability to
distinguish between music licensed through the settlements and
those tracks still in dispute. In addition, it presumably allows
MP3.com to track playback in the detail required by the pact with
the music publishers.
"Consumers don't necessarily want to hear about the incredible
engineering that went behind the creation of this technology, but
rest assured that it's a monumental achievement," Michael
Robertson, MP3.com's chairman and chief executive officer said in a
statement today.
Robin Richards, the company's president and chief operating
officer, said the reopening of MyMP3.com would be a boon for the
artists and labels "who stand to benefit from potential new
revenues."
"We believe that the service will stimulate CD sales and generate
enthusiastic activity from our users," Richards said.
The MP3.com can be found at: http://www.mp3.com/.