Email this article Format for printing

Fool Interview with Michael Robertson, CEO of MP3.com
Part 2

May 23, 2000

Tom: We saw the Napster lawsuit. Napster closed down more than 300,000 accounts after the band Metallica sued to halt the trading of Metallica songs over the Internet. What are your thoughts on Napster's legal problems? And do they in any way affect what you all are doing?

Robertson: Well, we're both in court, that's the similarity. But really, the similarity stops there. Napster allows any person to share music files without any compensation for the record labels or the artists. Our system compensates artists each time songs are downloaded, or each time CDs are sold, etc. The Napster case is very different from ours. We have technology outrunning copyright law. The problem is trying to take a law that was written 30 years ago and apply it to a digital age that was never contemplated when the law was written. You get some very interesting results, but it's not unusual. We saw these same legal battles with the VCR and cable TV when they first came on the scene as well. So, historically it's not unusual.

David: You've got $400 million in cash sitting on the balance sheet, is that right?

Robertson: I think a bit less, but that's close.

David: Let me now turn to the car, which is where so many of us listen to music. What's the future for bringing the MP3 format to cars?

Robertson: Well, we'll be at the MP3 Summit June 20th and 21st in San Diego. There we'll have cars on display showcasing some of the new technology that puts portable MP3 players right into cars. But, where it really takes off is when there's an Internet connection in the car, because then you don't have to worry about moving your songs back and forth. Wherever you have access to the Internet, you're going to have instant access to your entire CD library -- and that's probably about two years off. In the interim, the next 6-12 months, you're going to see some portable MP3 players that will plug into cars.

David: Does that mean companies like Sirius Satellite Radio (Nasdaq: SIRI) and others? Are you talking about that form of Internet in your car radio?

Robertson: No, not really. Most of the satellite radio-in-your-car efforts today don't have any interaction or personalization. They're just commercial-free radio stations. You don't get to pick the songs, you don't get to skip songs or make your own playlist. That's really the power of having all your music on the Internet. Each customer gets his own personal music collection. So, we're a little beyond the satellite services.

Tom: Michael, I want to take a 10-year trip with you, and just work back from there. Ten years from now, if MP3.com is as successful as you want it to be, what will it look like? How will it be serving the world, either in recording or elsewhere?

Robertson: Well, every consumer will have his own personal account to store all of his music for life. You'll never lose CDs again, because all your music is going to be on the Internet. And, when you buy your Nokia cell phone, your Palm Pilot, or any electronic device -- your Internet alarm clock -- it's going to have a setting where you plug in your account information. Once it knows who you are, it's going to be customized for just your music. That's, I think, the big future. "The CD jukebox in the sky," some people have called it.

David: What's the business model that has you benefiting from that 10 years from now?

Robertson: MP3.com is really an infrastructure company. We're building the digital highway to move all this music. Today we have massive storage. We do one-third the traffic of Akamai (Nasdaq: AKAM) , if you're a listener familiar with Akamai, who works for 400 of the largest Internet companies in the world. So today we're already serving personal accounts for tens of millions of people, and I think that's really our forte -- not in producing the music, but in delivering the music. How we make money is just like a TV station or a cable system. Sometimes it's from advertising, and sometimes it's from a monthly fee.

Tom: Michael, when you talk about making money, you have an interesting additional revenue stream coming your way according to Brian in The Motley Fool community at boards.Fool.com. He has a question for you about domain names. "Could you ask Michael why he's engaged in domain name squatting? Some of the domain names he presently has registered are tu-cows.com, audiograbber.com, talk-city.com, and metacrawler.net." What's going on there?

Robertson: Well, when we started MP3.com, we registered a lot of domain names, some of which we have transferred and some of which we haven't... but obviously you work that out when the companies come along calling for their domain names.

Tom: What is tu-cows.com?

David: That's a pretty popular site for techies?

Robertson: Tucows.Com is a great software archive. Any of you looking for a great, fast software archive, check out Tucows.com. They allow you to have fast downloads of all of the popular software.

David: So, you registered tu-cows.com with a hyphen? What is the strategy with that?

Robertson: We registered these many years ago, probably three years ago. A lot of those will have redirects to Tucows.com but, along the way, we'll let you know some of the other services we have.

David: Michael, do you have Motley-Fool.com?

Robertson: No, but should we?

Tom: Let's get on the phone right now.

David: Final question. Michael, looking back over life -- how old are you now?

Robertson: I'm 33.

David: You're 33 years old. You've already started a few companies. Was the entrepreneurial bug in you at UCSD? What was your major, and what was your B.A.? How did all of this come about for you at such a young age?

Robertson: Well, you know, I grew up really poor. So I think that has a way of motivating people, and I do have the entrepreneurial bug. Hopefully, after three companies, maybe I got it right with MP3.com.

David: That's great. Thank you very much. Good luck to you, whether it's in the courts, outside the courts, all of that relevant. A lot of people are counting on you, so I wish you best of luck with your work at MP3.com.

Robertson: Hey, thanks for having me on the show.

David: Our pleasure.

 Related Links