Aus, thread
Before we get too lathered about MP3.com, read this report from Steve Harmon:
<<MP3.com, the latest in a flurry of online music companies to go public, has the week's largest offering. The San Diego company seeks to raise $209 million in an offering of 12.3 million shares priced between $16 and $18. (Expect a high-end pricing, maybe even $20.)
MP3.com does not own the rights to the MP3 data compression technology that is angling to be the Internet standard for audio downloads. But it owns a swell domain name, and that should confuse enough investors to give the IPO a strong push and some flight time.
The company makes most of its revenue ($1.2 million last year) from advertisers, but I suspect ad revenue will hit a low ceiling because there won't be much driving traffic to this site, particularly the all-important repeat traffic. For while MP3.com offers thousands of songs, they're almost all from the guy you saw down at the open mike night in the local bar.
And even if that guy is great, you'll most likely have to buy a compilation CD to hear him. I don't think a lot of people will go for that.
With long-term revenue growth from advertising and e-commerce far from ensured, MP3.com strongly needs a new revenue stream. Right now it pays nothing for its content (artists submit songs for free in exchange for exposure); it may need to revisit that strategy and pay for rights to commercially viable acts, especially since the IPO will give the company a war chest.>>
Tulips anyone?
As the Sarge used to say on Hill Street, "Let's be careful out there."
Sam |
