By Richard Menta- 3/21/01
As Net music companies search for more ways to generate income, services that were once free will now incur a charge. One of those free services, MP3.com's unique Payback for Playback service will soon go that route.
Payback for Playback rewarded artists who drew listeners to the music they posted on MP3.com with a modest stipend. The most popular acts can generate a couple of thousand dollars per month in royalties. Last February artist Emily Richards earned over than $13,000 for the month, not bad for a free service.
Now Emily and the 150,000 other artists who took advantage of the program will have to pay $19.99 a month if they wish to continue their participation. For Emily and others who are profiting more than $20 a month, the fee is non-issue. Still, even though the fee is fairly modest and does increase the kitty of available award money, a high percentage of artists in the program do not meet the break even point to justify their continued involvement. They will probably drop out.
To help limit that dropoff, MP3.com's new premium version of the service will offer participating musicians extra perks on the MP3.com site like greater preference given to position on chart listings and search results and ad-free web pages.
With investment in dot coms decreased to a trickle, and the stock market witnessing its biggest weekly drop in its history last week, sites like MP3.com have to watch every dollar and develop new revenue streams to get closer to a profitable position. Some like Riffage.com and AtomicPop.com closed their doors last year after running out of money.
Losses in the court room have already cost MP3.com a significant chunk of its on-hand cash supply. The company was ordered by a federal judge several months' back to pay out $53.4 million to Universal Music Group. This is after MP3.com agreed to pay the remaining four major record companies $20 million each to settle their claims out of court.
Naturally, the news has not been greeted warmly by MP3.com's artist community even if they understand the reasoning behind it. Many artists only earn a few dollars a month from the program and some now feel they are being left behind.
"Next they'll be charging us to be on their site!" wrote one individual in the site's artist forums. "They're almost as bad as the record companies at this point."
Copyright 2001 MP3 Newswire
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