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Vivendi To Acquire MP3.com

Posted by michael on from the join-the-collective dept.

Herschel Krustofsky writes: "Vivendi Universal finally got tired of suing MP3.com and decided to buy them out. Look for MP3.com to become the platform for Duet, the new online music venture from Vivendi and Sony Music. Any coincidence this happens right after the industry puts the breaks on SDMI?"

38 of 78 comments (clear)

  1. Well, there goes the indy artists on mp3.com. by Anonymous Coward · · Score: 2

    How long before Vivendi starts strangling the independent people on mp3.com not to keep their stuff on mp3.com unless they sign some one sided contract with them?

    1. Re:Well, there goes the indy artists on mp3.com. by victim · · Score: 5
      You mean we haven't already signed onesided contracts? My tiny little band makes nice music, but nothing that will ever be popular. Let's see what MP3.com has in their contract bag...
      1. mp3.com routinely sends us email telling us the rules have changed and these are the new rules.
      2. the pay-for-play program divides a pot of money between the artists, but mp3.com refuses to state the formula for the payout.
      3. if they believe you are attempting to trick the formula you will not be paid.
      4. a month or so ago the bands were unilaterally notified that if they wanted to earn money, they must pay mp3.com $20/month in order to be elligible to be paid. How about if your employer serves you with a $20/mo paycheck-privelege-fee?
      5. bands which are not paying their $20/mo still deplete the pay-for-play pot of money, except mp3.com keeps instead of accrueing it to the bands.
      6. it is right at impossible to get a straight answer from them on any matter.
      7. if you watch closely the song play statistics (that govern your pay through the mysterious, but presumably monatonically increasing function) will sporadically change and reduce your plays. No explanation.
      8. despite mp3.com's denials, artists complain that their band contact email addresses are used to direct marketing.


      Remember, the bands are all paying their own production costs up front. There is no mysterious development costs for guiding the bands into success. mp3.com is just a distribution chain and they manage to screw the artists at every turn.

      That all said, I still like the concept. I don't make music for money. If someone can enjoy my music, then great, go to it. mp3.com is just a nice distribution channel where I don't have to pay for the bandwidth.
  2. Re:Another way to view this... by abischof · · Score: 4

    It seems that all of those indie artists on MP3.com just got sucked in by a big label. This is reminiscent of the ongoing pattern of indie labels being bought out (or fake indies being created by) the big labels.

    Of course, you can always cross-check any so-called indie labels against the RIAA Memebership List. In fact, since I don't buy CDs from the RIAA anymore (thank goodness for Century Media!), I make use of that list quite often.

    Alex Bischoff

    --

    Alex Bischoff
    HTML/CSS coder for hire

  3. MP3s? From Universal? Fat chance. by acb · · Score: 2

    Unprotected MP3s from Universal?
    Wake up and smell the burning corpses of your dreams.

  4. Re:Who now airs independant artist... by acb · · Score: 2

    Well, there's iuma.com. Not as slick, but it'll do the job.
    And a few others.

  5. Re:MP3s? From Universal? Fat chance. by acb · · Score: 2

    Emusic.com hasn't been changed yet, not by the new owners. The site says nothing about it being part of Universal, for example. If a change happened, it had been in the pipeline before the deal.

    Once the deal is finalised, expect the MP3s to go byebye, replaced by auto-expiring SDMI downloads like on Duet. Or expect emusic.com to just redirect you to the Duet subscription page.

  6. IUMA is still around by acb · · Score: 2

    Or at least they were this afternoon...

  7. Upper levels? Methinks not. by acb · · Score: 2
    Come on... Universal are the Nike of the music industry, the dominant brand of evil and bastardry. Let's see...
    • They are the largest of the recording companies (with about 30% of the market)
    • They have a history of fucking over artists. Their name comes up disproportionately frequently in stories of artists getting the short end of the stick.
    • The artists who make it on their labels (now including the likes of Island, Def Jam, Polydor, &c) tend not to stick around once the initial contract expires, as they would otherwise be pressured into doing what they don't want to. All part and parcel of dealing with the largest recording company in the world.
    • On another note, Universal, along with Sony, have taken the hardest line against the MP3 format, online distribution and so on. Witness Edgar Bronfman Jr.'s speech about why anonymity on the Internet must be outlawed to save free enterprise. (Incidentally, Bronfman is still running the Universal Music Group.)
    I don't know about Universal Studios, Canal+, Connex, Vivendi or any other companies they run, but the Universal Music Group is about as evil as recording companies have gotten at this stage of their evolution. So much so that I actively avoid buying CDs from them (well, them and Sony).
    1. Re:Upper levels? Methinks not. by acb · · Score: 2

      They are, but the same people (i.e. Bronfman et al.) as before are in charge of the Universal Music Group; since the Vivendi acquisition, UMG have been hawkish about music distribution (their handling of mp3.com, &c, going beyond the call of due diligence to shareholders). And they're still screwing artists (witness Courtney Love's lawsuit). (Then again, Polydor have been fucking artists over for decades, to name one label.)

  8. Taking the MP3 out of MP3.com by acb · · Score: 3

    Anyone who has watched Vivendi Universal for a while will know that they are mortally opposed to "insecure", nonproprietary audio formats, including MP3. Vivendi would be more than happy if MP3 was wiped off the face of the Earth.

    Expect mp3.com to change its name and abandon unencrypted MP3s, either reencoding in a proprietary format, or wrapping all downloads in Universal/InterTrust's BlueMatter rights-management layer.

    1. Re:Taking the MP3 out of MP3.com by Kris_J · · Score: 2
      And then expect the artists that actually make up MP3.com to quickly get tired of their audience complaining that they can't play the audio files and move to another service that serves unencrypted MP3s.

      I have two portable MP3 players -- a Rio PMP300 SE and an Ericsson MP3 handfree kit. They only play ordinary MP3s. I have purchased and found software that lets me turn a Realaudio stream into an MP3 so I can listen to tech news while I'm exercising, but buggered if I'm going to do that for every new proprietory, paranoid format.

      --

  9. Another way to view this... by John+Whitley · · Score: 3

    It seems that all of those indie artists on MP3.com just got sucked in by a big label. This is reminiscent of the ongoing pattern of indie labels being bought out (or fake indies being created by) the big labels.

    While the legal and financial arrangements btw the artists and MP3.com haven't changed as a direct result of this acquisition, it will be interesting to see what Vivendi does on this count (*cough* screwtheartists *cough*) in coming months.

  10. Missing the point (sturgeon's law). by landley · · Score: 5
    In any publishing industry (music, books, video), content is cheap. The real value is fighting off sturgeon's law.

    Sturgeon's law says that 90% of everything is crud. The contents of mp3.com are the same as a book editor's "slush pile", which is full of a thousand amateurs all trying to write the great american novel, and 99.5% of them really sucking at it. mp3.com has every garage band on the planet that can rune Lame or BladeEnc sending in a demo tape, and most are really awful.

    This is normal. There's great stuff out there, but you have to find it. This is why search engines exist on the web, because most web pages are terrible and pointless, and the value is in finding the good ones. That's what SLASHDOT does! (And why slashdot's comments have a ranking system.)

    That's what Red Hat or Debian does bringing out new Linux distributions, going through the hordes of code on freshmeat and such and finding the stuff that's worth including.

    Fighting off sturgeon's law is a useful service, quite possibly THE most successful business model on the web. Skimming off the cream, polishing it up, and packaging it in a shiny box. But that is -NOT- what mp3.com did.

    mp3.com did for music what sourceforge does for open source or what geocities does for web pages. It's nice, but it also rapidly fills up with unfinished or even random cruft. It's also not something people are really willing to pay for, except maybe to view advertising. The very "freeness" of it is why people use it. It's a big public canvas, blank space in which amateurs can scribble.

    What mp3.com needed, and what they never had, was an editorial board that found their top 1%, collected it together, polished it, and promoted it. THAT is the valuable service music companies have forgotten they provide. (NOT distribution, sorting through heaps of demo tapes to find talent and then, once upon a time, nurturing it.)

    Same with the motion picture industry, the point isn't that they can crank out yet another crocodile dundee movie but that they can find people like Steven Spielberg and hand him the budget to make "Jaws". These days the new talent is going to atomfilms.com or some such, and getting lost in the slush pile...

    Fighting off sturgeon's law is a service people ARE willing to pay money for. If you can ensure quality and save them time, they will pay for it. Always have, always will. The publishing industries are terrified of the web taking away their distribution role, but only because they've forgotten why they were the ones who had something to distribute.

    Rob

    1. Re:Missing the point (sturgeon's law). by kgb23rd · · Score: 2

      You mean something like lists of the most popular music, divided into genres? Even as specific as "Ambient Drum N' Bass" or "Hardcore Punk Music "? If only someone could do that...

      (Seriously, maybe my music is random cruft on MP3.COM, but it's not too hard to find popular stuff. Also, many artist have "artist we like" links.)

  11. What about the artists? by GuNgA-DiN · · Score: 2

    If you are a band that has been selling your CDs through MP3.com and offering free MP3 samples of your tunes -- do you get to tell Universal to go screw themselves?

    In other words - does Universal have the right to convert your music to a proprietary format (like WMA, or Liquid Audio) ?? Do they have the rights to continue distributing your music?

    I've only used MP3.com as a user. I've never actually created any music. But, I would be interested to hear from anyone who has uploaded their music there before. What was the EULA like? Do you agree to give MP3.com (and now Universal) all rights to your music to distribute as they see fit?

    What if you object to their new format? Does your music just "disappear" ?

    1. Re:What about the artists? by tester13 · · Score: 2

      IIRC the terms of the contract is surprisingly good. The artist retains all rights to the song and can opt out of the service at anytime. As for changing the format of my music, It never crossed my mind at the time so I am not sure.

  12. There goes the neighborhood by marxmarv · · Score: 2
    The largest existing vendor and promoter of independent music just sold everything to a major. I'm sure the terms will change for the worse as far as the artists are concerned.

    Who can fill mp3.com's shoes now that IUMA is dead?

    -jhp

    --
    /. -- the Free Republic of technology.
  13. Re:Death of a quality service by MadAhab · · Score: 2
    Good point. If you put the right mime type for m3u (audio/x-mpegurl) into your apache configs, you can "stream" mp3 via apache. TCP streaming with no variable-bandwidth aspect isn't true streaming, so Apache and wget can fake it well enough.

    There's also a program called "streamripper" which can save mp3 streams, which is good for when you're not doing an on-demand download of one track. It also has support for autosplitting files and works nicely on the command line with mpeg123 so you can listen at the same time.

    Boss of nothin. Big deal.
    Son, go get daddy's hard plastic eyes.

    --
    Expanding a vast wasteland since 1996.
  14. Any Coincidence... by brianvan · · Score: 3

    ... that this happens when mp3.com's stock price is way down and Napster's dying off?

    It could be a good business venture for them. There's a lot of original artists on there, and it's basically a seeding pool for new artists. And it's got brand name recognition, too. Maybe they have some good plans for it.

    Or maybe it's a conspiracy to take away our dear MP3 files from us and force us to rent our N'Sync from big fatcat record label honchos a week at a time. Oh well... anyone up for some non-copyrighted Mozart?

    1. Re:Any Coincidence... by divec · · Score: 2
      The recording itself is still copyrighted
      The thing about classical music is that anyone can do it. Find a good amateur orchestra which is willing to let people copy their Mozart's 41st Symphony performance, out of the goodness of their hearts or for publicity reasons, and that recording is genuinely worth having. Unlike with an amateur rock band, people will listen to the recording because it's Mozart and 99% of people can't tell a good orchestra from an amazing one.
      --

      perl -e 'fork||print for split//,"hahahaha"'

    2. Re:Any Coincidence... by darthpenguin · · Score: 2

      Oh well... anyone up for some non-copyrighted Mozart?

      One problem... although the music itself is not copyrighted anymore, the same copyright laws apply to classical music as other types of music. The recording itself is still copyrighted, and I'm sure that any of the music labels would get just as pissed off if your traded classical albums. The only freedom that you have by listening to classical is that you can make your own recordings and not have to pay any licensing fees to the author.

      Remember, you can't trade the store bought albums.


      -mdek.net

  15. It just goes to show.... by Gogl · · Score: 2

    That money can still do just about anything. You sue somebody enough and they'll be willing to sell out. It's a pity too, MP3.com was a great place for somebody to get their start trying to sell their music, or at least get publicity. I have several friends who have sites up their, and I myself have used it on more then one occasion.

    This is a sad day indeed. It makes you think, if enough money is thrown at them who else could sell out? Suddenly DALnet's April Fool's Joke doesn't seem so funny anymore....

  16. Re:other news by big.ears · · Score: 4
    In other news, Microsoft got tired of the Government sueing them and decided to buy them out. Bill Gates, the new Vice President of the United States of Microsoft was quoted, "It is a perfect fit. We are both bloated monopolistic bureacracies with income derived from legally-required regularly-levied fees placed upon all citizens. For these fees, we both provide over-valued and frequently broken services. Plus, we are both headquarterd in a Washington. Together, we will provide a new level of leveraged enterprise services capitalizing on a new global market provided by our newly-achieved economies of scale." Protesters will be placated by recieving a 7 billion-dollar tax cut.

    Sorry--I couldn't resist.

  17. Is mp3.com really worth $372 Million? by lukel · · Score: 4
    I thought the internet bubble had burst. How can mp3.com possibly be worth $372 Million?

    The article says: Vivendi Universal is to acquire one of the top worldwide Internet brands. MP3.com's brand and web site are well-known to a global online gathering of music fans and artists. But $372 for a brand name, it doesn't make sense. Then there's their proprietary-patented technology for music distribution... But anyone can put mp3's on a website, and if they're any good, people will find out about them and download them. Then there's the aggregate audience ... close to 40 million registered users, but at $372 Million, that's almost $10 a user.

    It seems like the suckers haven't leant yet.

    1. Re:Is mp3.com really worth $372 Million? by mech9t8 · · Score: 2

      Also, MyMP3.com's CD library and verification scheme. Useful for all sorts of things - like licensing out for the "play any cd in the store just based on the barcode" demo stations at the higher-end retail stores...

      Still not worth the valuation, but don't forget they aren't paying cash, they're just dishing out some (probably overvalued) shares...
      --
      Convictions are more dangerous enemies of truth than lies.

      --
      Convictions are more dangerous enemies of truth than lies.
      - Nietzsche
    2. Re:Is mp3.com really worth $372 Million? by sleeper0 · · Score: 3
      I thought the internet bubble had burst. How can mp3.com possibly be worth $372 Million?

      Well, I'm no stock analyst, but I worked in the industry and might have a few insights into what mp3.com has that might be valuable.

      First is their cash position. You can check out MP3.COM's 01Q1 10Q right here. They have about 90 million in cash right as of april 1st. They also have about 40 million in pre-paid multimedia licenses to the labels. They count total assets of US $190m.

      Second would be their network. Networks for serving massive amounts of high bandwdith content are difficult to build, and are valued highly by wall street and investment bankers. The process of building one from scratch is difficult, and very time consuming. Not to mention the value of having done it for some time, having worked out the kinks, monitoring systems, staffing, etc.

      Third would be software innovation. Universal recently paid millions of dollars to www.com for the farmclub jukebox project. It was lame. MP3, while perhaps not the best at what they do, has consistently developed and rolled out products that push the industry. A record of performance in software development can be worth a lot.

      Forth might be elimination of competitition. With the .com crash, mp3.com may be one of the only viable competitors left in the space. Real is locked up, microsoft has been convinced to stay out of the market for the time being. Eliminating competition is never a bad idea.

      So I don't know if they are worth $372m, but of course, that's essentially the going price. I doubt they're too worried about either the brand or the existing application. I doesn't make sense to value them on users as one would assume duet will bring it's own users.

      Just my $0.02.

  18. Re:s/breaks/brakes by Chester+K · · Score: 2

    Any coincidence this happens right after the industry puts the breaks on SDMI?

    You must mean brakes.

    We break it, they brake it.

    --

    NO CARRIER
  19. Death of a quality service by mcrbids · · Score: 2

    Given the past history of Universal, expect the massive libraries of MP3s to disappear VERY QUICKLY.

    If you like listening to all the alternative music, DOWNLOAD YOUR FAVORITE LISTS NOW! (while you still can) Don't forget Napster, now a mere remnant of its past glory...

    If you are a Linux user, remember that XMMS has some real neat options for saving streams to disk.

    I have two instances of xmms (in different logins) streaming stuff to disk as I write this, burning probably 100k/sec...

    Just set the audio output of the program to be to trash file (EG "/dev/null") and then in the option for the MPEG player plugin, specify to save the stream to a directory.

    The file names are even preserved! Bring up a big playlist of your favorite genres, and stream away...

    It's a shame, tho, that such a good quality service will be (most likely) lost forever... My tastes in music have expanded so dramatically (well beyond the manufactured pop churned out by the RIAA) thanks to this site!

    -Ben

    --
    I have no problem with your religion until you decide it's reason to deprive others of the truth.
  20. Close It Down by PingXao · · Score: 2

    A couple of years ago there was a pub in town that I absolutely hated. Hated it! I went there occasionally only because I had some friends who frequented it since they lived nearby. The owner was an idiot and the bartenders were rude and obnoxious. After a few pints I'd tell my friends, each and every time I found myself in that hellhole:


    <B>When I hit the lottery I'm going to buy this place and close it down.<B><BR><BR>
    Vivendi is now doing <em>exactly that</em>! They <em>hate</em> mp3 trading. In order to impose some sort of proprietary licensed digital music distribution system, they will have to use a format other than mp3.<BR><BR>
    mp3 is dead.
    Long live mp3!

  21. s/breaks/brakes by AntiNorm · · Score: 2

    Any coincidence this happens right after the industry puts the breaks on SDMI?

    You must mean brakes.

    ---
    Check in...(OK!) Check out...(OK!)

    --

    I pledge allegiance to the flag...
    of the Corporate States of America...
  22. wonderful by NeMon'ess · · Score: 3
    Now we finally get our first look at how much the music companies think their music is worth/can gouge the consumer for. The annoying part is when Vivendi wants two dollars per song and finds almost no takers it'll cry to the world that we're all just theives out to take advantage of the poor starvings artists.

  23. It looks like a pretty good deal all around by hillct · · Score: 5
    From the article:
    The transaction has been structured as a reorganization that will be tax free to MP3.com shareholders to the extent they receive Vivendi Universal shares. Consistent with its previous statements, Vivendi Universal will not issue new common shares in this transaction, but will use treasury shares for the share portion of the aggregate transaction consideration. The Board of Directors of MP3.com has unanimously approved the transaction. Holders of more than 50% of MP3.com's outstanding shares have agreed to vote in favor of the transaction.
    MP3.com shareholders get a fair value, with tax advantages, and Vivendi aquires a valuable internet property without diluting it's currently outstanding shared, or risking any previously held positions.

    Free Music advocates might object but from a financial perspective it looks like a sound deal

    --CTH

    --
    --

    --Got Lists? | Top 95 Star Wars Line
  24. will there still be any MP3's at MP3.com? by Dr.+Awktagon · · Score: 2

    It will be funny.. in a few years you probably won't be able to actually download any MP3s at MP3.com.. just proprietary file formats and streaming audio.

  25. Re:haw. by antek9 · · Score: 2

    The above post is merely sarcastic, not off-topic, and anyway is worth a reply: I'm an mp3.com artist myself, and no, it hasn't been that nice at all, at least not for the last year or so. They have gotten worse and worse in terms of service (delays before new songs get approved, technical support is an euphemism for what they have to offer...), and starting from last month they require you to pay a monthly fee of 20$ in order to be able to collect any of your 'payback for playback' royalties! Which doesn't really pay in my case, so I was about to leave them for good anyway.

    So, obviously, no tears from me.

    --
    A World in a Grain of Sand / Heaven in a Wild Flower,
    Infinity in the Palm of your Hand / And Eternity in an Hour.
  26. Re:haw. by antek9 · · Score: 2

    Ok, here's some more info, for those who are interested. Mp3.com just sent out a short FAQ today, staying somehow vague in some matters, but the main point is, they'll (for the time being) continue service as it was:

    Q. Will MP3.com artists remain independent?
    A. Yes. The terms and conditions of the various artist agreements will not automatically change as a result of this transaction. MP3.com will continue to function as an independent distributor of music content for all independent artists and record labels.
    Q. Will my music belong to Vivendi Universal?
     A. No. As stated above, the terms and conditions of the various artist agreements will not automatically change as a result of this transaction.
    Q. Will MP3.com continue to operate as it does today?
     A. MP3.com will maintain its role as an independent distributor of music on the Internet. MP3.com will continue with current pursuits, as well as work with new partners to innovate subscription systems and music offerings that reach a global audience across many devices.
    Q. How will this announcement affect me? What will change?
     A. MP3.com will continue with its current offerings, including marketing, promotion and a full roster of online services for all artists.
    Q. Will Payback for Playback continue?
     A. All current artist services will remain in effect.

    --
    A World in a Grain of Sand / Heaven in a Wild Flower,
    Infinity in the Palm of your Hand / And Eternity in an Hour.
  27. and all this by waspleg · · Score: 2

    right after rob glaser (ceo of real networks)
    congressional testimony which also included an announcement of their own propreitary formatting and deal with 5 major record labels for a subscription based service

    seems to me like they will all price themselves out of hte market.. since it's free right now ;)

    and no one wants to buy music they can't share with their friends..

  28. Re:What about Universal's purchase of Emusic? by sleeper0 · · Score: 2
    Whatever conclusion you reach, it's already quite clear that Universal is not ruling out the exploitation of the demand for completely unprotected mp3's. At least, not yet

    It's really unlikely. Like 100% unlikely. It makes a lot of sense retaining the existing features of services you buy (especially those that aren't any kind of threat... emusic) especially while the hill is watching closely.

    Bu there's no way universal will launch any kind of comprehensive service like duet without digital rights management. Since real is taken, you're most likely talking about intertrust DRM+MP3 or microsoft DRM+WMA. I assure you, universal's stock holders won't allow them to do anything different.

  29. other news by zoombah · · Score: 4

    in other news, the Government got tired of their lawsuit against Microsoft, and decided to buy them out. Federal Spokesperson Robert Hausley was quoted, "Well, frankly, we'd love to get into this whole monopoly thing too. We figure that we can consolidate the "establishment" of corporate values and government enforcement with this deal. Protestors were placated by $10 rebates on Microsoft XP.