From: Ciamac Cyrus Moallemi (email@example.com)
Date: Thu Jan 13 2000 - 08:55:43 PST
my.mp3.com strikes me as one of the more clever ideas to have appeared
recently, and from a company whose lack of a business model is extreme even
by .com standards. They've ripped 40,000 popular cd's and made a library,
when you open an account they ask you to put in each of your cd's to verify
ownership, and then they allow you to stream that music from their servers
anytime anywhere. Further if you buy a cd from them or one of their
partners, they instantly grant you access to the online version, without
needing to wait for the cd to arrive in the mail (and this seems to apply
to major label releases, not just mp3.com artists). They effectively bypass
the technophobic record companies. Anyone willing to wager on how long
it'll take the RIAA to sue?
MP3.com Plans to Let Users Store Music Files on Its Site
Service Likely to Raise Copyright Concerns
By SARA ROBINSON
In a move that threatens the recording industry's attempts to control the
distribution of music online, MP3.com, a San Diego-based company that
operates a popular music Web site, plans today to launch a service that
will enable customers to store music online.
While the service will employ a password security system, it could
facilitate the swapping of copyrighted music over the Internet by users who
decide to share their passwords and thus the music they have stored online.
Like the Jukebox software, made by RealNetworks and another software
developer, MusicMatch,, the MP3.com service will enable consumers to record
CD's as MP3 files or to listen to such files on their computers.
But unlike the existing Jukebox, the new service will be Internet-based,
meaning that a customer will have access to his or her music from any
Internet-connected computer. As wireless technologies improve, the company
says the service will be available on Internet devices as well.
The company plans to establish 10 million accounts today for its existing
Initially, the service will be free of charge, but eventually it will
require a paid subscription.
"The move is fundamentally sound for these guys," Mark Mooradian, an
analyst at Jupiter Communications, said.
"Being the default repository where consumers keep all their stored music
will be a linchpin of success in the music business."
But he added that the service seemed duplicable.
"Unless it's for legal reasons, I don't see why RealNetworks wouldn't dive
into this very quickly," he said.
Consumers who open accounts on the MP3.com site will be able to place CD's
into their CD-ROM drives and, if the titles are in MP3.com's database
(currently at 40,000), a digital copy will be automatically transferred to
their my.MP3.com accounts. In addition, a consumer purchasing a CD from
MP3.com's online retail partners will simultaneously obtain a digital copy
of the CD in their account. Among MP3.com's partners are Duffelbag.com,
JungleJeff.com, Cheap-CDs.com, and CDGlobe.com, and the company said more
agreements were in the works.
Since the password scheme puts the security of the service in the hands of
MP3.com rather than the record labels, the recording industry is likely to
react unfavorably to the service. As of last night, MP3.com executives said
they had not informed the Recording Industry Association of America or any
other industry group of their plans. They said they intended to brief
industry officials sometime next week.
Last year, the R.I.A.A. launched the Secure Digital Music Initiative to
develop technological standards to combat rampant music piracy on the
Internet, most involving files in the format known as MP3. That effort is
still far from complete, and it is not clear whether the security
technologies the industry eventually adopts would make MP3.com's service
Mark Lemley, a professor specializing in Internet law at the University of
California at Berkeley, said it was likely that MP3.com would be sued but
that the company had a good chance to win such a case if it could
demonstrate that the service was being used legally by a substantial number
"As long as there are a substantial number of people making legal use of
the service, it doesn't matter if there are a whole lot of people making
illegal use," he said.
"The recording industry would have to sue the individuals."
Michael Robertson, chief executive of MP3.com, said the company had
"thought a lot" about the recording industry's response to the service and
had made a number of concessions to copyright concerns.
If two users simultaneously try to access the same account, for instance,
one user will be automatically bumped off as a way of discouraging the
sharing of passwords, he said.
More important, Mr. Robertson said, the service will allow the music to be
streamed, but not downloaded. A computer plays streamed audio files as it
receives them but does not store the files on the hard drive.
Even so, several programs exist for recording streamed files on a user's
hard drives. Streambox, a company fighting a lawsuit from RealNetworks for
copyright infringement, was in the process of building such a capacity into
its software before the issue of a temporary restraining order last month,
a Streambox spokesman said.
While Mr. Robertson said he was aware that such tools exist, he argued that
MP3.com was striking the right balance between the concerns of content
providers and those of consumers.
"This encourages people to buy CD's while discouraging proliferation of
content," he said.
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