Don’t call it a comeback because Michael Robertson has been in the music space for years. Today, though, Robertson will unveil a new music service along with companion Linux hardware and software applications that create an alternative to Microsoft and Apple’s digital entertainment hubs.
At 6:30 AM PST, Robertson, CEO of the desktop Linux firm Linspire, will unveil MP3Tunes.com, his first digital music product in four years. His last foray, MP3.com, had an Icarus-like trajectory, once enjoying a $65 per share stock price before being felled by hundreds of millions of dollars in lawsuit payouts and swallowed by Vivendi Universal, one of the conglomerates that originally filed copyright infringement lawsuits against the company.
The new service stays true to Robertson’s tactics, both old and new: The song catalog highlights unsigned and independent artists, features no digital rights management, and runs on Linux. While MP3Tunes plays it safe and will only offer non-major label music, it’s more than just a download service.
Visitors to the Web-based MP3Tunes.com can purchase individual MP3 songs (encoded in a high-quality 192-kbps rate) for 88 cents or a single album for $8.88. Currently, the service is launching with music only from the distributor CD Baby, which specializes in unsigned artists, or artists whose labels allow them to offer DRM-less songs for sale online. CD Baby has 415,000 songs that will be available on MP3Tunes.
Once a user signs in and downloads a song, a copy of that song stays inside each purchaser’s “online locker” at My.MP3Tunes.com, and is available for re-download at any time, free of charge, when you return to the service.
“It’s like a junior version of My.MP3.com,” says Robertson, comparing it to the music locker service at MP3.com that eventually led to his downfall. “Once you download this music and you prove that you bought it, you can access it forever.”
It’s a simple concept, yet one that in today’s DRM-based online music world is pretty compelling and highlights a jarring fact: Whether you’re purchasing music from Apple’s iTunes or Napster’s new ToGo program, users never truly own your music outright.
Apple, for example, dictates the number of computers on which a song can be played. With Napster, the restriction is more upfront and the basis of the business model: You’re renting the music. Cancel your subscription and the music disappears.
Following in Apple’s footsteps, Robertson is hoping that his move back into the music space will help jumpstart sales of his Linux products. To that end, he will also unveil a digital music hub program called MP3beamer, which will be sold for $20 as a standalone piece of software for Linspire users. A combination package of the Linspire operating system and the MP3beamer program is also available for $79, or as part of a Linspire-based “music appliance” desktop for $400.
The desktop PC, also called MP3beamer, is a fully-functioning computer that allows users to centrally store, access, and deliver MP3s to other PCs and stereos over wireless connections. Any PC or device connected to the music appliance box can access the music through any browser on any operating system. What’s more, if one PC uploads new music onto the hub, the music libraries of each connected computer are automatically updated and synced.
With the release of MP3Tunes and MP3beamer, Robertson is aiming to bring digital music to the desktop Linux market.
“If you’re running Linux on the desktop today you can’t use any online music stores out there,” Robertson says.
In addition, with the hardware component, Robertson is hoping to tap in the very small-but-growing digital entertainment hub market, a market for which Linux, with its stability and low cost, is potentially well suited.
That said, significant hurdles remain for MP3Tunes and MP3beamer. MP3Tunes is following the old MP3.com model of publishing the music of little-known artists, but when MP3.com debuted in 1997, no major label artists were available for legal download.
Today, of course, most major labels license sizeable swaths of their catalog for sale online. Going with the no-DRM strategy, while laudable from a consumer rights standpoint, limits the catalog choice initially to CD Baby. CD Baby is an online retailer that has made its name as an artist-friendly organization that give artists 91 percent of the digital music revenues.
But one of its top-selling artists, according to CD Baby president Derek Sivers is Melissa Ferrick. Ferrick’s last album has sold 8000 copies since its release in June 2004, according to Neilsen Soundscan. Not exactly top 40 stuff. Sivers says he only recently found out that CD Baby would be the exclusive catalog provider for MP3Tunes.
“I was surprised to find that out,” Sivers says.
Robertson says he hasn’t had any contact with labels about licensing their catalog but, true to form, he’s confident they’ll come around to his model.
“Their music is already in MP3 format on the Internet today,” Robertson says. “I’m putting a price tag on it. I don’t think it’s a radical position.”
Of course, one could argue that the desktop Linux community, with no legal download services available to them to date, will leap at the chance to buy music online.
Even if Linux users flock to Robertson’s new offerings, though, that community is still very small. Its overall percentage of the North American PC market is at best in the very low single digits. By many research estimates, there were only six million shipments and redeployments of Linux PCs in 2004.
And those numbers will make it tough going for Robertson’s new music offering. Robertson says he earns “about 20 cents” of gross margin on each song.
“We have to get big scale to make it work,” he says.