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In a jaw-dropping announcement, one of the pioneer online digital music companies announced that Vivendi Universal has offered to acquire the company for $5 a share of stock, roughly $372 million in cash and stock.
It’s ironic that
MP3.com’s biggest enemy in the recent lawsuit against the my.mp3.com service, who
was awarded $53.4 million dollars from the lawsuit, will now own the company.
Vivendi Universal stated that they aim to create multiple revenue streams to enhance Vivendi Universal's current online strategy, but will allow MP3.com to remain a “Independent Distributor of Music Content for All Record Labels and Independent Artists”. Time will tell how true to their words Universal is about allowing MP3.com to continue to remain truly independent.
Some of the potential implications of this merger are mind boggling to the music industry.
Will Universal allow independent artists to continue to use the DAM CD services and split profit with MP3.com on the sale of CD’s online, when this could potentially conflict with some of their artists record contracts which give Universal a much larger chunk of the profit rather then 50 percent?
Will Universal give more respect to the MP3 format, and give it a solid adoption as a viable legal format to distribute digital music online from a major label standpoint?
Just what does this mean for the future of the “Payback for Playback” system which has been giving some of the more popular artists on MP3.com an option of making money in the digital music space?
With the acquisition, Vivendi Universal also picks up the “Music InterOperating System (IOS)”, a new technology which MP3.com has been innovating which connects connecting retailers, labels, music players, and the likes through direct hardware and software adaptation.
Michael Robertson, current CEO of MP3.com will transition to a role with Vivendi Universal as a special adviser to Jean-Marie Messier, specifically advising on the future of Vivendi Universal's digital distribution.
“The MP3.com strategic acquisition is a big step forward for Vivendi Universal's priority to develop and implement an aggressive, legitimate and attractive offering of our content to consumers. MP3.com will be a great asset to Vivendi Universal in meeting our goal of becoming the leading online Music Service Provider. Our first step toward leadership in digital distribution was the creation of Duet with Sony Music and distribution agreement with Yahoo!. With MP3.com's proven technologies and team, we'll have the tools and talents to aid the success of this and other digital content distribution ventures. Their engineering and digital expertise will be a tremendous advantage for Vivendi Universal, especially in the digital distribution of all Vivendi Universal content and the creation of common technology platforms.” - Jean-Marie Messier, chairman and chief executive officer of Vivendi Universal
“This groundbreaking merger is a defining moment in the digital music era. It brings together industry leading technology, brands, distribution and content. We will continue with our current MP3.com pursuits, but also work with our new partners to innovate subscription systems and music offerings that reach a global audience across many devices. We believe consumers will see the full promise of digital music come to fruition and that transaction is in the best interest of our shareholders.” – Michael Roberson, CEO of MP3.com
While the final approval of the acquision sits on the table with the MP3.com shareholders. It appears that Vivendi Universal has the ball in their court now, and how they plan on utilizing MP3.com in their “online strategy” in the future will shine forth to the public in the future.
Mike Darrah
skidmark
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Frawgster
Anonymous
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Chad
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