With the gag of his company's mandatory quiet period removed, MP3.com's CEO Michael Robertson chatted recently with IDG. Robertson sounded off about his company's public offering, public misperceptions and the future of MP3.com.
IDG: MP3.com was one of the most publicised IPOs [initial public offerings] in quite a while. Did the hype raise awareness about what your company actually does?
Robertson: No. Someone asked me today, "Doesn't it take a lot of really expensive equipment to listen to a song?" People don't know what we do. They know we deal with music, but they don't know what we do exactly.
What was the dumbest question anyone asked you?
Someone on the roadshow actually asked us what our URL was. I thought he was joking. He wasn't.
What else did they grill you on?
One question that came up a lot was how do we make money?
How do you make money?
We actually have a very diverse business model. Oftentimes, people think of us as a record label, whose business it is to sell CDs, which we do. But in actuality, MP3.com is a combo of music companies. We're like a radio station, in that we make money off advertising. And we're like CDnow because we sell CDs.
Your relationship with Alanis Morissette and Tori Amos [Note: MP3.com is sponsoring the artists' five-and-a-half-week tour together] gave MP3.com publicity and cachet. Do you think you'll be hooking up with any other rock stars?
I don't know. We're still working through this relationship. The tour started a couple days ago. At each of the 20-something shows, an MP3.com artist is performing as the opening band that Alanis and Tori picked off the site. At the first one, [MP3.com artist] Greta Gaines opened, and she got an encore. We were pretty excited about that.
You're adding hundreds of new artists to your site daily, and unlike other MP3 sites, you don't use editors to find the good stuff or filter out the bad stuff. Are you going to promote your artists so people can get to them?
Yes and no. There's the natural reaction for us to want to promote artists in the traditional music industry ways. The way we try to tap that problem is to provide technological methods and tools to help people access the music. About a month and a half ago, we started sending e-mails to our database of people who had bought CDs. Based on what they'd bought, we sent them two e-mails a month with personalised recommendations. We can do things like that on a very precise level.
What are the advantages to user recommendations versus staff recommendations?
We had a song from [MTV comedian] Tom Green on our site. He put up a song called The Bum Bum Song and it immediately hit No. 1 on our charts. And it's absolutely awful. If you had a human editor, it would be at the bottom of the bottom. But given that our system is based entirely on what consumers are doing, that content is able to go to the top and give consumers what they want.
Will MP3.com combine forces with any other Net music sites?
MP3.com is a fairly unique music company, because it's been an outspoken critic of the music industry as it operates now.
It kind of puts us in very limited quarters, because everyone else says, "We'll do whatever [the majors] want, because we're dependent on them for content."
So with MP3.com, we'll focus on building our own company rather than working from an external basis.
What's up next for MP3.com?
Starting on October 6 and running until November 20, we're launching the MP3.com Technology Tour, hitting 25 of the largest college campuses.
It'll be an affordably priced, festival atmosphere of different booths showcasing the latest hardware and software, and an extreme games tent. There will be a couple of stages with the hottest local bands from that college town, and from MP3.com, that will play during the day.
Singing the praises of MP3.com's IPO
by IDG staff
Getting in on a Net IPO is a must in these acquisition-happy days. Millionaires-in-the-making get all kinds of hot investment leads from the media. But the press coverage of Netco stock offerings isn't a hotbed of investigation or even scepticism.
Take online music site MP3.com. For months, it's received a boost from the buzz over digital music and the fact that its fortunes are tied to the future of MP3, the Net's reigning musical format. In the week preceding its July IPO, the media ushered along the profitless company with no real business plan. The tiny company took in just $US670,000 last quarter yet bled out $1.4 million. But a heads-up look at the week's stock offerings gave some rosy vitals on MP3.com, including the 100,000 tunes stashed on the site, the 1 million page views and word on an advertising deal and a partnership. "MP3.com shareholders will be singing all the way to the bank," Net analyst Sylvia Carr chirped.
"If you create a Web site people want to come to [and come back to], money will follow - somehow." This is despite an uncertain stream of ad revenue and lots of unknown artists. The lack of a plan didn't bother IPO analyst Gail Bronson. "They've got all the elements in place: major shareholders, venture capitalists, strategic partnerships."
And, as predicted, MP3.com now has millions of dollars of the public's money. After debuting at $US28, shares reached an intraday high of $105 and then settled at $63. Market value? $4 billion!