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MP3.com

From Alfawiki
MP3.com
Company typePublic (until acquisition)
IndustryOnline music
FoundedDecember 1997; 28 years ago (1997-12)
FounderMichael Robertson, Greg Flores
Defunct2024
FateAcquired by Vivendi Universal (2001); original website dismantled; assets sold to CNET (2003)
Headquarters
United States
Area served
Worldwide
Key people
Jean-Marie Messier (CEO at time of acquisition)
ProductsOnline music store, streaming service, artist web pages, Pay for Play system
ParentVivendi Universal (from 2001)
Websitewww.mp3.com

History

MP3.com was established in December 1997 by Michael Robertson and Greg Flores as a division of Z Company, which also ran several websites including filez.com. Noticing a significant volume of searches for "mp3" on filez.com, Flores acquired the MP3.com domain from Martin Paul to capitalize on this interest. Originally designed to funnel traffic toward Filez.com’s pay-for-placement search listings, MP3.com rapidly drew over 18,000 unique visitors on its opening day and immediately generated advertising revenue, prompting the company to shift its primary focus to MP3.com.

In 1998, the National Academy of Recording Arts and Sciences (NARAS) rejected an MP3.com advertisement intended for Grammy Magazine due to limited advertising space and concerns surrounding the product’s controversial nature.

By June 1999, Cox Interactive Media had invested $45 million to acquire a 10% ownership stake in MP3.com. Together, they launched mp3radio.com, a platform offering MP3 downloads, concert tickets, and CD sales connected to Cox’s terrestrial radio outlets.

MP3.com went public on July 21, 1999, raising more than $370 million in what was then the largest technology initial public offering. The stock debuted at $28 per share, surged to an intraday high of $105, and closed at $63.3125.

At its height, MP3.com provided independent artists with personalized web pages (www.mp3.com/*artist*). Late in 1999, it introduced "Pay for Play" (P4P), an algorithm-driven system compensating artists based on the number of streams and downloads. Between mid-1999 and 2003, musicians uploaded roughly 96 hours of audio daily—equivalent to 16 years of continuous playback—with all material vetted for licensing adherence.

Early supporter Alanis Morissette sponsored a tour via MP3.com and owned close to 400,000 shares. She sold her shares through SEC filings in late 1999 and early 2000, netting $3.4 million in gains.

MP3.com served over 4 million MP3 files daily to upwards of 800,000 unique visitors from a registered user base of approximately 25 million—delivering around 4 terabytes monthly from three data centers. Its engineering team created the Pressplay platform (acquired by Roxio in May 2003), later utilized in the relaunch of Napster. MP3.com also managed eMusic, Rollingstone.com, and Vivendi Universal music assets. Their proprietary content delivery network and data warehousing systems processed seven terabytes of customer profile information.

Infrastructure

The technological backbone of MP3.com consisted of more than 1,500 Intel-based servers running Red Hat Linux versions 5.2 through 7.2 within load-balanced clusters hosted by AT&T, Worldcom, and the now-defunct Exodus Communications. It was among the pioneering massively scalable Internet architectures for media streaming, regularly managing global traffic volumes up to 1.2 Gbit/s. Core software components included C, Perl, Apache, Squid, MySQL, Oracle, and Sybase.

My.MP3.com

Debuting on January 12, 2000, "My.MP3.com" enabled users to register their physical CDs and stream digital versions online with the aim of monetizing legally owned music access. However, the record industry filed suit against MP3.com for unauthorized copying and copyright violations. In UMG v. MP3.com, Judge Jed S. Rakoff ruled that MP3.com had infringed by creating mechanical copies without authorization. MP3.com reached a settlement with UMG Recordings for $53.4 million, securing rights to utilize its music catalog. Despite this resolution, financial difficulties amid the technology market downturn led to the service’s termination following acquisition.

Sale of MP3.com

Amid financial challenges, MP3.com was purchased by Vivendi Universal in May 2001 for around $372 million, paid in cash and stock at $5 per share—significantly lower than its initial public offering price. At the time, CEO Jean-Marie Messier described the acquisition as a crucial component of Vivendi’s plan to establish a dominant online music platform utilizing cutting-edge technology.

Vivendi encountered difficulties in expanding MP3.com and ultimately dismantled the original website, divesting assets such as the domain name and logo to CNET in 2003. CNET intended to introduce replacement services through its download.com platform.

The MP3.com division known as Trusonic, which specialized in providing background music and messaging solutions for retail environments and held licenses covering 250,000 artists and 1.7 million tracks, collaborated with GarageBand.com to restore artist profiles. Trusonic preserved much of MP3.com's software infrastructure and continues operations today under the Mood Media brand.

On March 25, 2009, MP3.com announced plans to redirect artist pages and category listings to Last.fm.

External links

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