Long before the Napster controversy captured the headlines, Michael Robertson was being portrayed as the music industry's public enemy number one. Although the chief executive of MP3.com achieved a large degree of legitimacy for his company when he settled copyright- infringement lawsuits with the five major record labels (at a cost of $225m), his battles, legal and otherwise, appear to be far from over. On Monday, a US district judge declined to approve class- action status for a copyright suit brought against MP3.com by 1,000 independent labels, but Judge Margaret Morrow said she would reconsider the ruling if the plaintiffs refiled within 45 days. MP3.com also faces lawsuits from other independent labels, including Britney Spears' Zomba Recording.
Yet 34-year-old Mr Robertson remains confident his company has the technology and the business model (not to mention the legal team) to become the leading player in online music. "We're a technology company," he says. "We build technology that works with music, so, in that regard, we are a music company. But what makes us unique is that we're very good at delivering digital music. That's what we do."
In less than five years, the San Diego-based entrepreneur has built MP3.com into a multi-million-dollar concern. Though the dot.com bubble has burst, he remains very wealthy, on paper at least. In the mid-Nineties, the graduate from the University of California was running a software company and realised that MP3 kept cropping up on search engines.
"It was a great brand, it had user recognition. Consumers were definitely aware of it. So I bought the domain name MP3.com for $1,000 from the guy who had registered it and gave him, some friends and family shares in the company. He did OK. That thousand dollars has paid off for sure. But I didn't really have a vision, it was more of an evolution. It was just looking to see where the future was going to go. If all music was available digitally, what would that be like? I was sort of taking those baby steps. MP3.com was the first music website that actually had full songs. That sounds silly today, but, at the time, everybody had pictures and stories about bands but no actual music."
Last month, MP3.com had an average of 880,000 unique users per day, with some 144,300 performers and 926,500 songs available on its MyMP3.com website. Through its Payback for Playback programme, the company distributes $1m per month directly to artists, from Madonna to the smallest garage band. Mr Robertson likes to boast that last year two performers earned $100,000 from the programme, and a further 97 reached $10,000 and 250 collected $5,000. "More than 90 per cent of them have come to their Web account to manage their music. They get precise statistics to assess what's going on with their music online."
Up to now, MP3.com has provided the Payback for Playback service free to artists. But now it has announced that, as of 1 April, artists will still be able to put their music on MP3.com free, but they will have to pay $19.99 a month to participate in the revenue- sharing programme. Madonna won't have any trouble covering the fee, but less-well-known musicians will struggle to cover their costs. Most artists with music on MP3.com earn less than $240 per year from the programme.
Unsurprisingly, many are angry at being charged. "I think that it sucks that MP3.com was [created] for the unknown artist and now, unless you are rich enough, there is just no way of making it," wrote one on the MP3.com message boards.
Tens of thousands of artists are in the programme, but the introduction of the fee is not expected to improve MP3.com's bottom line. Instead, the fees will help cover the administrative costs of tracking music downloads and determining payments.
"Eventually, all music will be stored digitally, not just back catalogue but your own personal collection," says Mr Robertson. …