He Wants His My.mp3.com
by Brad King
8:40 a.m. 15.Mar.2000 PST
AUSTIN, Texas -- It's not difficult to explain why Michael Robertson, the CEO of mp3.com, has become such a controversial figure in the realm of digital distribution.
Since his company was formed in March 1998, Robertson has become the poster child for everything good and bad about moving music on the Internet.
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When independent artists from his Web site speak of their experience on mp3.com, they gush -- nearly falling to their knees to praise him for giving them the opportunity to reach out to their fans.
But when music industry executives -- including those employeed by the legal arm, the Recording Industry Association of America -- talk about Robertson, it is often off the record and with disdain. He represents a threat to every layer of their business, not only from a loss of distribution control, but also the potential loss of revenue.
It's no surprise, then, that Robertson created a huge buzz in January when he took on the major labels by unveiling my.mp3.com, a service that allows customers to access their home music library via the Web. By simply downloading his software and placing a CD in the disk drive to prove the user owns the CD they are listening to (dubbed Beam-It, in mp3.com terms), consumers can then stream their music -- which is housed on the mp3.com servers -- anywhere they want, any time they want.
Ten days after my.mp3.com was announced, the RIAA sued Robertson for copyright infringement, claiming his business model was based on selling music that other people created and owned since he hadn't obtained a license that pay the musicians, or the industry, royalties.
The controversy stems around the database of music mp3.com streams to its customers. Instead of having each person upload the data on each of their CDs -- which would take about 20 minutes -- Robertson went out and purchased 80,000 CDs for his database and continues to add 1,500 CDs a day.
In an exclusive interview, Robertson sat down with Wired News at the SXSW Interactive Festival to talk about the future of the music industry.
Wired News: Why is my.mp3.com a good thing for the music industry?
Michael Robertson: If you look at today's music industry, they make all of their money selling CDs. Everyone is talking about selling music digitally. The problem with that is that you are going to cannibalize the CD sales. The reason you buy a $16 CD is because you like one or two of the tracks. If you start selling singles digitally, the net effect to the music industry is going to be less revenue, not more.
But look at the movie industry, where they have box office receipts and then as the product ages they have pay-per-view, video sales, video rentals, cable TV, and free TV. The movie starts off as a product and moves into a service. By doing this they are hitting different price points. At the movies, if you are willing to pay $7.50, you can see the movie when it first comes out, then the price comes down until eventually you watch the movie for free, wrapped up in advertising.
My.mp3.com creates a service model for music. The only way to get music in the my.mp3.com account is to have the CD, so it encourages people to do the right thing. And it grows the CD sales.
WN: Why, then, is the industry unhappy with you?
Robertson: A lot of it has to do with control. They want control of this music and they are seeing that control slip through their fingers as the Internet grows up around them.
WN: The lawsuit is primarily about purchasing artists' CDs and making a database that people can access. Can you create that database without physically going out and purchasing the CDs?
Robertson: Sure, we can do that, it's just a really shitty experience for the consumer. When you use Beam-It, we could copy all the data from the CD, compress it, and ship it up to our servers, but the consumer has to pay the price for that, not us. They have to take 20 minutes instead of 20 seconds to get their album. The consumer is the loser in that scenario.
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