MP3.com Beats Napster to Offering Membership Service
MP3.com appears to have led the way for previously free file-sharing communities in what will likely become a trend of striking deals with record labels and offering services for a membership fee.
The Recording Industry Association of America has criticized and sued both MP3.com and Napster, forcing them into a race to produce services that do not infringe on its copyrights, thus bringing the association another revenue source.
MP3.com's announcement comes less than a month after the company reportedly agreed to a $53.4 million cash settlement with Seagram's Universal Music Group, an agreement that has apparently resolved the company's battles with the RIAA.
But MP3.com still has a battle. Unity Entertainment Corp. on Nov. 16 led a class-action copyright infringement lawsuit against MP3.
The Recording Industry Association of America also has sued Napster. The file-sharing service began work on a membership service after striking a deal with heavyweight Bertelsmann AG. Officials speculated that Napster would begin charging $5 per month once a membership-fee service is established.
Napster is still in the process of appealing a July court decision that ordered it to shut down pending a trial on copyright infringement charges.
As for the new My.MP3.com services, users will have the option to store up to 25 CDs of music for free. This service will be advertiser driven and thus heavy with ads.
Users' second option is to pay $49.95 per month for the ability to store 500 CDs of music on a service that will offer more functionality and less advertising.