Vivendi Universal, parent company of the Universal Music Group, has bought controversial digital music distributor MP3.com.
In a statement released Sunday, Vivendi Universal said it bought MP3.com for $372 million and will rely on the San Diego company's technical achievements to advance its online digital music subscription service, Duet, a joint venture with Sony Music that is expected to launch this summer.
Universal, along with the other four major record companies, sued MP3.com in January 2000 over its My.MP3.com program, which allowed users to listen to CDs online. While the other labels settled, Universal took the case to court and won $53.4 million in a federal court judgment in November.
The purchase comes one week after a major Nashville song publisher for artists including Garth Brooks, Tina Turner and Barry Manilow sued MP3.com asking for an unspecified amount of money for alleged copyright infringement.
Several singers and songwriters, including Tom Waits (who has a back catalog distributed by Universal), Randy Newman and Heart's Ann and Nancy Wilson filed a similar lawsuit on May 8, seeking damages of $40 million (see "Ann And Nancy Wilson, Tom Waits, Randy Newman Sue MP3.com").
MP3.com, which features more than 150,000 artists on its site, will still include music from a variety of labels and independent artists.
"We will continue with our current MP3.com pursuits, but also work with our new partners to innovate subscription systems and music offerings that reach a global audience across many devices," MP3.com chairman and CEO Michael Robertson said in the statement. "This groundbreaking merger is a defining moment in the digital music era." As a result of the friendly, combined cash and stock transaction, Vivendi Universal has enlisted more than 120 MP3.com employees to reinforce its efforts in online music, subscriptions, branding and technology. Duet, which will be marketed and distributed through Yahoo, is its first priority, Vivendi Universal chairman Jean-Marie Messier said in the statement.
MP3.com recently designed the Music InterOperating System, which allows the music industry to interact in ways previously unavailable by connecting retailers, labels, music players, and hardware and software tools.
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