Big Five Continue to Gobble Competition

Vivendi Universal SA Acquires Mp3.com

Will Universal Support the Independent Artists?

And Saturday, May 19, 2001, Robertson announced he and the company had finally reached OZ: and acquisition by the world's largest record company, Vivendi Universal SA.

The $372 million deal would end the independent existence of the San Diego-based Mp3.com, which unwittingly found itself at the very center of the digital music controversy. Handicapped by a series of lawsuits filed against it by record labels and incredibly ignorant rulings in trial court, the company still managed to settle with most music corporations, except Vivendi's Universal Music Group, which won a $53 million judgment in court.

For a complete list of the stories concerning the long legal battles between Mp3.com and the RIAA, click here.

With MP3.com, Universal buys one of the premier online music company with both a large and loyal user base AND the technological infrastructure necessary to run a large-scale streaming service. Michael Robertson will become a special adviser to Vivendi Universal Chairman Jean-Marie Messier.

Universal has already announced it plans to launch Duet, a music subscription and downloading service as a joint venture with Sony Music.

And Universal is not alone in acquiring or starting music services. Bertelsmann AG has formed an alliance with Napster to start a subscription-based service. AOL Time Warner is working with RealNetworks, Bertelsmann and EMI Group PLC to create a paying service called MusicNet.

The WIZARD'S primary concern is that Universal doesn't understand what it is buying. The my.mp3.com Locker Service was the focus of the lawsuits. But it has actually been a near total failure, with few users showing any desire to fork over money just to store music already legally purchased. According to regulatory filings, 92 percent of the company's $22 million in revenue last quarter was generated by advertising, not from users using the locker service.

What has brought mp3.com it's large and loyal base of users, 165 MILLION WEB VISITS in March alone (up 16% from last year), is the marvelous resource of thousands of independent artists and bands, who offer their music for FREE to users and then also sell CD's on the site. These artists represent a real threat to Universal. Or a potential resource. We'll need to wait and see how Universal handles the web site.