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Markets are funny. Ask MP3.com
Vivendi Universal Acquires MP3.com
By LTVNET
(more articles from this author)
2001-05-21
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The big news this week is Vivendi Universal's buyout of MP3.com. As expected, all the reports seem compelled to draw comparisons with the Bertelsmann/Napster deal. But perhaps the bigger story is this apparent trend in the entertainment tech business. Plaintiffs giving money to defendants? I thought it was the other way around? I say let's all do something illegal, grab Web market share, get sued and make money!

Almost a year ago, I interviewed CEO Michael Robertson about his company's legal fights, back when they were still negotiating settlements with major record labels. To hear that interview, click here. (mp3 - 1.7M)

Was this a good move for MP3.com? Yes it was. If I'm Mr. Robertson, I'm thinkin', "Cool. No more lawsuits specifically aimed at my demise? No more endless nights of devising schemes to make shareholders feel comfortable about our growth potential? Very cool."

On the other hand, we shouldn't minimize the fact that Universal went from a $53m judgment against MP3.com to buying them at $5 per share, a 66% premium over last Friday's $3 per share. Only a couple months ago, you could buy MP3.com for well under $2 a share.

This all happened within a six-month period. What the hell's goin' on? lol

I mean, I know $372m ain't squat to Vivendi Universal, but what are they thinking? Seriously.

Yes, they get the MP3.com domain name. Yes, they get a bunch of MP3.com recording artists. (But U can get artists anytime) They even claim that MP3.com has great untapped technology that will benefit Universal's online business. (I can't wait to see it)

But I think fear was a main catalyst behind this move, as well as other recent moves in the world of online music distribution. The majors understand that they have to be aggressive, but they're not very clear about what they should be doing. The result is an array of "online strategies," none of which address what caused this madness in the first place.

YOUR PRODUCT COSTS TOO MUCH!

Stay tuned; the whacky war over online music distribution is far from over.

Linkography

Bertelsmann - www.bertelsmann.com
MP3.com - www.mp3.com
Napster - www.napster.com
Vivendi Universal - www.vivendi.com

Related News from Mi2N:
» Vivendi Universal Acquires MP3.com In Move To Strengthen Digital Distribution Capacity And Web Audience
» Vivendi Universal Total Revenues For First Quarter 2001
» Universal Music Group Announces Close Of Successful Initial Offering Period And Provides For Subsequent Offering Period In Its Cash Tender Offer For EMusic.com


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