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MP3.com in fee relaunch
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November 15, 2000: 1:32 p.m. ET
With record industry suit settled, MP3.com to launch subscription service
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NEW YORK (CNNfn) - Having overcome its legal tangles, MP3.com plans to relaunch its online music system My.MP3.com later this month as a fee-based subscription service, Chief Executive Michael Robertson told CNNfn on Wednesday.
On Tuesday, MP3.com put to rest a copyright infringement case with Seagram Co.'s (VO: Research, Estimates) Universal Music Group by agreeing to pay $53.4 million in damages. Universal was the last holdout among the five major record companies that filed suit against MP3.
 "We're going to turn our technology, My.MP3.com, on hopefully in November with all of the record labels content," Robertson told CNNfn's "Before Hours." "So that really swings open the doors of content."
Investors cheered the agreement. Shares of MP3.com (MPPP: Research, Estimates) soared 63 percent on Wednesday morning to $6.50, up $2.50 from Tuesday's close.
My.MP3.com, launched originally in January as a free service, will offer two options, he said. One will be free and supported by advertising, but with restrictions on the amount of music a user can load, while the pay service will be free of ads.
Robertson said the move will give consumers new ways of buying music. Instead of paying, for example, $16 for an album, customers can subscribe, for a smaller, yet-to-be-determined fee, to a jazz channel. The system would be similar to the way they subscribe to basketball games on their cable system.
"The exciting thing here is that we have been working the technology to deliver music digitally for three years, and with today's announcement the largest music companies in the world will provide their catalogs to allow us to do that," Robertson told CNNfn. "Everyone in the business is excited about moving from a world of trucks and plastic CDs to a world where the music is zapped, instantly and digitally."
My.MP3.com, which allowed users to store music digitally and later access it via any computer, was shut down in May after a U.S. district court held that a database of 80,000 albums copied by MP3.com, an integral part of the service, violated copyright law.
Universal gets warrants to buy MP3.com shares
In a related matter, MP3.com on Wednesday said it sold to Universal Music Co. warrants to purchase up to three million shares of its common stock, at  specified prices ranging from $3.75 to $5.00 per share and over terms of one to three years.
If fully exercised, the shares would giving the world's largest record company a potential stake of nearly 5 percent in MP3.com.
The purchase price was not disclosed and company officials were not immediately available for comment. But industry sources contacted by Reuters on Tuesday said Universal paid about $250,000 for the warrants.
--from staff and wire reports 
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