Music Streaming Service Once Valued In The Billions Before Collapsing
If you access MP3.com now, you’ll find a home page filled with links to
various news articles in glorified clickbait fashion. But once upon a time, it was home to a vast music sharing network worth billions…at least on paper!
Today, we take for granted the idea that we can easily access practically any type of music through the web. With the rise of DSL and Broadband by the turn of the century, it was much easier to stream or download digital media in ways that earlier Internet access, with its 56K maximum speed, couldn’t.
In the Beginning
Mp3.com began in 1997 as a file inquiry and sharing platform, its revenue generated by pay-for-placement click through results. Think of a search engine specifically delivering information on where to find music and other software files. MP3.com received over 18,000 unique users in the first 24 hours of making the URL live, with advertisers not far behind.
MP3.com Launches as an IPO
On July 21, 1999, MP3.com went public, offering shares at $28 and raising $370 million. It was the largest technology IPS at the time. By day’s end, shares rose as high as $105 before settling at $63 by the end of the day. At their height, they reached a valuation of $6.9 billion.
Music Uploads: A Great Idea For The Modern Era
Two innovative ideas made MP3.com a powerhouse in the early years of the digital music scene. One was the Pay For Play option, allowing independent artists to upload their own music and simply get people to listen to it. An algorithm determined a dollar value based on the number of individual song “listens”, and a payout would be sent to the artist. Pretty cool!
MyMP3.com was also launched that allowed users to upload music from CDs they owned. Users would enter the CD’s UPC code for proof of ownership and, voila, they could listen to their CDs through any device connected to the internet by logging onto the site. Not everyone was happy about this arrangement, and things began to change.
The Downfall
At one point, MP3.com delivered over 4 million MP3 audio files per day to over 800,000 unique users on a customer base of 25 million registered users. However, the recording industry saw MyMP3.com as “unauthorized duplication” and sued for copyright infringement. MP3.com lost, and settled with plaintiff Universal Music Group for $53.4 million in exchange for permission to use its entire music catalog. Unfortunately, the “dot com boom” had ended, and MP3.com no longer had sufficient funds to weather the downturn. They sold to Vivendi at $5/share. Vivendi couldn’t make a go of the service, and sold what was left to CNET…and here we are!
Legacy of MP3.com
Were they ahead of their time? Perhaps. As we continue into the third decade of this century, we are allowed access through digital outlets providing us with a nearly endless supply of our favorite music. Digital downloads and streaming music, even Internet Radio Stations, have become common in the virtual landscape.