Feeds

MP3.com seeks to placate Universal

$250 million in damages will be hard to swallow otherwise

  • alert
  • submit to reddit

The Essential Guide to IT Transformation

MP3.com CEO Michael Robertson yesterday said the online music company will continue to talk to Universal in the hope of reaching a settlement to the two firms' bitter copyright dispute.

He needs to. Last week's judgement that the company must pay between $118 million and $250 million in damages could seriously harm MP3.com's finances.

The company has already put aside $150 million to cover legal costs arising from its failure to prevail in the copyright violation suit brought against it by the Recording Industry Association of America earlier this year. In addition to costs, it has had to pay out around $80 million to Sony, EMI, BMG and Warner in both out-of-court damages and music licensing fees. All of that should be covered by the $150 million, but there's no way the Universal payment can be, even if MP3.com's appeal to get the damages reduced is successful.

The company's revenues last quarter, its second of fiscal 2000, hit $20.3 million. It posted a $5.2 million operating loss for the period. Under normal trading, you'd expect the loss to narrow some and the revenue to grow, but we doubt either will help the company much to offset the extra cash it will need to pay Universal. MP3.com's final loss for Q2 hit $177.1 million, once the lawsuit set-aside was taken into account.

Since MP3.com is losing money as it is, the company may have a tough time persuading its backers to maintain that level of debt. Its three-figure revenue growth rate should help a little. So will the now-humbled company's desire to work more closely with the major labels.

Robertson said in a statement that the ruling against it hasn't affected the company's day-to-day operation, but then it wouldn't. Its core customers aren't the sort to cease doing business with MP3.com just because the company's wrists were slapped over a copyright violation. ®

Related Stories

Universal routs MP3.com in court for $118m
Universal wants us dead - MP3.com
MP3.com loss balloons after lawsuit costs

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.