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MP3.com Europe won't include signature services

Industry Standard

(IDG) -- When MP3.com launches its European music sites, it will be without some of the technologies that got the company in legal hot water in the U.S.

MP3.com is set to roll out three new European sites in French, Spanish and German. The sites are being tested for reliability and will go live in two weeks.

But while the sites will be translated and massaged to feature popular local artists and culturally relevant music genres, they will not include either of MP3.com's signature services: My.MP3.com and Beam-It.

"We still have some negotiating to do to get an international license," says MP3.com Chairman and CEO Michael Robertson. "My.MP3.com will not be rolled out immediately."

My.MP3.com and Beam-It are services that allow users to instantly place music they own or that they've purchased online into a virtual locker. This is not achieved through any technological wizardry but rather via a database of 80,000 CDs that have been copied onto MP3.com's servers, which then can be transferred into a user's locker once he has proven he has paid for the music.

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MP3.com was sued by all five major record labels in the U.S. for creating the database without permission. They settled with four - Warner, BMG, Sony and EMI - and eventually received a license to use the database.

But that license only covers use in the U.S. For MP3.com to offer My.MP3.com or Beam-It in Europe, the company will have to negotiate for new licenses.

Since the initial suit and settlement, relationships between the four of the five labels and MP3.com have improved. Several have entered into marketing relationships with MP3.com, and Robertson is confident that negotiations for expanded licenses shouldn't present a problem.

"We are business partners with the labels now," he says.

But one license Robertson knows won't come easily is from Universal Music Group, the world's largest label, responsible for about 24 percent of global music sales.

Universal has so far refused to settle with MP3, and earlier this month a federal judge in New York ruled MP3.com was liable for $25,000 per copied CD, a penalty that could reach $250 million. MP3.com plans to appeal that ruling.

On Tuesday, Robertson appeared on a panel next to Bruce Hack, vice chairman of Universal Music Group, but there was palpable tension between the two. Hack gave the assembled group of analysts a well-produced road show outlining all the new-media initiatives of Vivendi Universal, including Farm Club, GetMusic.com, and wireless initiatives through Vivendi's Vizzavi WAP portal. Then, he directed a threat to other sites that illegally use Universal's catalog.

"The industry will close down illegal MP3 sites," Hack said. "The legal defenses of intellectual property have been completely effective."

Even before its official launch on the continent, MP3.com is the seventh-ranked entertainment site in Europe. It is a formidable competitor to an array of sites that are locally produced but have considerably less funding.

Ernesto Schmitt, CEO of Peoplesound.com, the top music site in the U.K., Germany and France, predicts MP3.com will stumble on its legal situation and the cultural realities in Europe.

"I note with interest that MP3.com could be in oblivion in a couple of months if they lose their lawsuit in the U.S.," he said. "It is going to take more than MP3.com translating their Web sites. It is a huge technological and cultural task to become a local content play across Europe."




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RELATED SITES:
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Sony
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