MP3.com loss balloons after lawsuit costs
But revenues rocket
MP3.com's Net-based music business is certainly thriving, despite losing a major copyright infringement case earlier this year. For its second fiscal quarter, the company saw revenues leap a massive 963 per cent year on year.
Revenue for the quarter hit $20.2 million, up from the $1.9 million MP3.com posted for the same period last year. The company posted revenues of $17.5 million for Q1 2000.
However, that growth wasn't enough to push the company into the black. It lost $5.2 million (eight cents a share), down from $6.3 million (22 cents a share) this time last year. Wall Street's expected a loss of 13 cents a share, according to First Call polls.
Adding on the quarter's one-off charges - in particular a $150 million charge resulting from the Recording Industry Association of America (RIAA) lawsuit - and MP3.com's loss hits $177.1 million, or 271 cents a share.
And MP3.com is expected to take a further $100 million charge this quarter covering licensing payments made to RIAA members as part of its settlement with the music business trade body - a settlement that is still being negotiated with some labels. And that's before damages, due to be fixed at a hearing on 28 August, get factored in. A hearing on Friday will decide whether the damages should be calculated on a per-song or per-album basis.
The RIAA's case against MP3.com centred on the music company's compilation of a database of 80,000-odd albums, used to allow CD owners to listen to their discs - which they had bought legitimately - from any PC via the Net. The service, MyMP3.com, was effectively a virtual CD player. The court ruled that even though MyMP3.com only allowed users to listen to tracks they already owned (by buying the CD), MP3.com's provision of those tracks was still an infringement of copyright laws. ®
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Court finds MP3.com guilty of copyright violation
Check out The Register's complete coverage of the Napster controversy