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MP3.com to Change Owner and Format

CNet buys the online music service from Vivendi. It will focus on providing news and information about digital music next year.

November 15, 2003|Jon Healey | Times Staff Writer

Once a rock star in the online music world, MP3.com is leaving the building.

The San Diego-based company helped launch the digital-music revolution five years ago by enabling independent artists to offer downloadable songs directly to the public.

But after two desultory years under the wing of global media conglomerate Vivendi Universal, MP3.com is about to change owners and stop the downloads.

A spokeswoman for CNet Networks Inc., an online media company , said Friday that it had purchased the MP3.com brand and Web address from Vivendi. Terms were not disclosed.

Rather than compete with downloadable music services such as Apple Computer Inc.'s iTunes Music Store, the site will focus on providing news and information about digital music when it launches next year, the spokeswoman, Martha Papalia, said. By contrast, the current version offers downloadable songs free and for pay, sells CDs with music in MP3 format and provides online music storage and custom radio stations.

Founded by entrepreneur Michael Robertson, MP3.com set out to overthrow the major record labels by letting artists reach fans through the Internet. But it never found a way to turn unknown acts into stars, or to turn the public's voracious appetite for music into profits.

Still, MP3.com has been a boon to independent musicians, said Larry Feldman, owner of online music distributor DMusic.com.

"It's about musicians having access to worldwide distribution" without the major labels, Feldman said. "That's the revolution."

Jeff Simpson, guitarist for San Diego alternative rock band Dr. Chunk, pointed out that several online outlets for musicians have sprung up since MP3.com started. "We all know now there are other opportunities out there."

Vivendi executives did not respond to requests for comment.

The main clue to CNet's plans came from a Web page for MP3.com artists, where CNet pledged, "We are working hard to build a service that will be best-in-class at hosting, promoting and showcasing your work."

MP3.com posted a note about the sale Thursday, alerting artists that it planned to destroy all of the music, images and other material soon after the current site shuts down Dec. 2. Musicians and former MP3.com executives said they saw the end coming long ago, after Vivendi put the venture on the block.

Things turned sour for MP3.com in 2000, when it launched an online music storage service that drew lawsuits from record labels, songwriters and music publishers. In May 2001, after paying more than $100 million in settlements and licensing fees, MP3.com sold its assets to Vivendi for $372 million.

Vivendi put MP3.com up for sale this year as part of its efforts to unload its entertainment ventures and pay down its debt.

CNet fell 48 cents to $7.36 on Nasdaq. Vivendi shares dropped 9 cents to $22.15 on the New York Stock Exchange.

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