Digital-Music Detente

By Chris Taylor/San Francisco

A few weeks ago, the idea that the recording industry would embrace Michael Robertson as one of its own was about as ridiculous as, well, as the notion that the leaders of North and South Korea would shake hands. Robertson, founder and CEO of MP3.com was trying to turn the music business on to the MP3 revolution, but all the suits saw was a maverick who went around claiming that they were dinosaurs who didn't get it. And when he launched the My.MP3.com service that allowed users to copy their CDs into his online folders and listen to them from anywhere they chose, those dinosaurs won a copyright-infringement court case that threatened to take the upstart dotcom for every penny it had.

But by the time that decision came down, the rise and rise of Napster had made My.MP3.com look like a littering violation in the middle of a full-scale riot. And Robertson, because he disavows the Napster free-for-all and sees a future in which record companies get paid for online distribution, has suddenly become a man the music industry can do business with. The settlement deal MP3.com cut with Warner and BMG two weeks ago--whereby Robertson will pay $100 million in damages and get a license to run My.MP3.com in return--is only the beginning of a beautiful friendship. If Robertson's vision is accurate, he and the record companies will streamline the $40 billion music business into a new digital-delivery system.

What he's banking on is that the majority of music fans will be prepared to pay a minimal monthly fee--around the price of a single CD--to have online access to thousands of albums. This music channel--along with the CDs already in their collections--will be available anywhere there's an Internet connection. Robertson believes the mainstream will choose this limited-pay model over legally dubious networks like Napster and Freenet. Thus far the rise of MP3s "has been painted as a college-kids-gone-crazy phenomenon," he says. "In fact, it cuts across all walks of life."

That includes classical-music aficionados, currently the fourth largest group on MP3.com who made a willing audience for the site's first such monthly-fee channel. "They're the techno-elite," says Robertson. "Also, these people have disposable income." For $9.99 a month, there are thousands of fully downloadable tracks. It's all-you-can-eat Pavarotti, Itzhak Perlman and London Symphony. A second channel for children featuring fairy tales and nursery rhymes as well as songs is set for launch in July.

Suddenly it seems the once radical Robertson is offering a third way between the rigid order of the old world and the chaos of Napster, a chance to make money out of wide but shallow channels of online music and still make a buck or two selling CDs in stores. That should be music to the dinosaurs' ears.

--By Chris Taylor/San Francisco