With Label Deals Secured, My.MP3.com Relaunches

Music storage program was shut down in May due to copyright infringement lawsuits.

After months of legal wrangling with the recording industry, MP3.com relaunched its My.MP3.com online music-storage service Tuesday (December 5).

The program allows users to listen to albums in streaming MP3 format from any computer, provided the user has proven ownership by inserting the CD into a computer for recognition.

"We can't help but think that the system that we built is somewhat vindicated now," MP3.com CEO Michael Robertson said Tuesday from the company's San Diego headquarters. "We were sued by the major five labels, who all licensed their catalogs ... which they wouldn't do if this was a fundamentally bad system for their intellectual property. Today we're offering the same service as when we first rolled out."

Because the company initially made thousands of CDs available without licensing arrangements in place, the Recording Industry Association of America's five major label groups sued MP3.com for copyright infringement in January. Sony, BMG, EMI and Warner settled out of court, but the Universal Music Group carried its lawsuit to the finish and was awarded $53.4 million in November.

The lawsuits led to licensing agreements with all five majors, as well as with numerous music publishers — a straight flush of deals an MP3.com spokesperson said is an exclusive.

But Robertson maintains that the RIAA's "sue first, ask questions later" approach has quashed development of the fledgling online music landscape.

"That's tremendously harmful to the industry," Robertson said. "That absolutely destroys all innovation. It has effectively wiped out all capital-raising opportunity for any digital music entrepreneurs that want to get involved in the space."

The free version of the My.MP3.com service includes multimedia advertising and allows for storage of 25 CDs. The subscription version has less intrusive but smarter advertising — it may prompt a Madonna ad for users who own several Madonna CDs, for example — and will allow users to store 500 CDs for a $49.95 annual fee.

Exempt from the 500 disc limit are special promotions, such as David Bowie's recent offering of live tracks accidentally omitted from his Bowie at the Beeb box set. CDs purchased from online retailers in MP3.com's Instant Listening program, which automatically adds just-bought music to the purchaser's My.MP3.com account, are also exempt from the limit.

Both versions of the service allow users to store any number of the more than 750,000 song titles made available by artists at MP3.com.

Robertson's vision for MP3.com's future involves connecting to more retail outlets, so that CDs purchased at brick-and-mortar stores will automatically be added to a buyer's My.MP3.com account. He also said he's looking forward to new hardware technology that will bring Web-based music to a wider consumer base, beyond the desktop computer.

"Where this really gets exciting is where you go beyond the early adopter, music-crazy people and move to John Q. Public Consumer — when I can connect to my music in my My.MP3.com account not just through a PC, but through a video game console or my Palm Pilot or my set-top box that my cable company provides for me, or even a specialized music appliance," Robertson said.