By Robert Menta- 12/06/00
After setting with the five major labels for a total of $170 million dollars, MP3.com resurrected its My.MP3.com service today.
The service, which previously was free, will now come at a cost of $49.95 a year for the ability to access 500 CD titles. MP3.com is also offering users a basic version of the service, allowing them to upload up to 25 titles without charge. The free service will add both text and audio advertisements to generate its revenue.
Additional revenue will come from the subscription fees for the full service and by selling marketing information about its consumers' listening tastes to record companies seeking to promote new music.
"Who has ever had the e-mail addresses of a million Madonna fans?" said Michael Robertson, CEO of MP3.com. "Nobody."
Anywhere users have Net access, the My.MP3.com allows them to listen to CD's that they already own without having to drag out the actual disk. Using software available by the service, users prove they own the music by inserting it in the CD-ROM drive of their computer. The software recognizes the title and grants access to the music, which is already digitized on MP3.com's site where it is streamed on command of the user. To prevent users from borrowing their friend's CD's to upload to the service, My.MP3.com will require users to re-insert the CD's at "certain intervals" to prove they actually own them.
It was the pre-digitization of the music to save users the tedious upload times of transferring each track that got MP3.com in trouble with the music industry and the NY courts. With an expensive appeal process facing them, the company chose to settle.
This settlement excludes the music from independent labels, some who are still pressing a legal case against MP3.com. There are also concerns by some industry wags whether users will actually spend for the service or be happy about their personal information being sold to the record companies. Mr. Robertson's excitement about selling the e-mail of a million Madonna fans may not be shared by the audience whose accounts may be bombarded with email from all five record companies and their subsidiaries.
Still, the MyMP3.com's service is not priced all that much more than a lot of shareware software sold on the Net. Indeed, they seem to have based their pricing model on Net music products like Real Player, which offers a basic version for free and a Plus version for $30.00.
Consumers have shown a willingness to pay a reasonable price for advanced features and service. My.MP3.com runs about $4.00 a month, the same price Napster CEO Hank Barry has proposed as a subscription price for his product. Success here could make it the subscription model that all future net products will be based on. Record companies like Universal Music Group have suggested a more expensive $15.99 per month fee for their future music stream service.
Upset fans feel that it's unfair to have to pay again for music they already paid for, but in this case they are really paying for a service of convenience, one that justs limits them to music they already own rather than stream all music like radio does. Granted, the only difference between this 'locker' service and Net radio is the fact that radio chooses the songs and order, whereas on My.MP3.com the user chooses.
That choice somehow makes My.MP3.com's NOT radio and therefore not subject to the same conditions. At least that is what the record companies claimed and a NY court affirmed. MP3.com just saw the legal cost of proving their case far more expensive than settling. So now they pay and so will the consumer.
The question is will consumers pay for the added convenience of choosing the exact tunes they want streamed to them?
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