MP3.com announces subscription system

MP3.com has launched a new music subscription system splitting revenue equally between the site and the artist or label
Written by Richard Shim, Contributor

MP3.com chairman and chief executive Michael Robertson announced Tuesday a new subscription system for music content.

The system allows artists and music labels to make subscription lists of available music for MP3.com users. Artists and labels control the price of subscriptions, allowing them to raise or lower prices depending on demand.

"At this point, no one knows what to make of subscription lists. Should we charge by song, album? What do we charge? Our system allows for dynamic responses to a rapidly changing market," Robertson said.

Under the subscription system, MP3.com hosts the lists on its site and provides technical support. For this, the company will take a 50 percent cut of the revenue for expenses, with the remaining 50 percent going to the artist or label.

The site went live Monday morning and by the end of the day, Robertson said, that there were hundreds of submissions.

"There will always be pirated music, but this is the first attempt to solve the digital music distribution problem," said PJ McNealy, an analyst at Gartner Group who covers consumer products.

The subscription system, in its current form, may not stop Napster users, McNealy said, but those users make up only a small fraction of the overall music market. McNealy sees the system as a preventative measure to keep that number from growing.

The new system is part of MP3.com's new focus on being an infrastructure company, or what Robertson has dubbed a music service provider, or MSP.

"The industry has to stop treating music like a package and start valuing its content and delivery," he said.

While the subscription system addresses the availability of content, MP3.com's developer kits address delivery of that content.

MP3.com announced the availability of MSP platform developer kits. The kits will enable programmers to make software that will allow users to access music on a range of devices, such as phones, cars and receivers.

The kits and the accessibility of music from MP3.com are the delivery part of an MSP.

With Extensible Markup Language, C and eventually Wireless Application Protocol development tools, the devices for MP3.com access will be broad. Robertson said MP3.com has about 20 development partners already. Initial products will be available by the end of the year.

Universal Music Group, EMI Recorded Music and Sony Music are currently suing MP3.com for copyright infringement. The company has already settled with Warner Music Group and BMG Entertainment.

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