In a bold move that took the internet community by surprise, MP3c announced the sale of the company to Vivendi Universal on May 20, 2001. I received an email to that effect at about 11 pm last Sunday. I must say that I certainly didn't see it coming, as there were no rumors about the sell off.

Anyone with music on the site has seen several changes in policy over the last few months that could have tipped us off that something was amiss. Most of the recent changes have all been aimed at generating revenue for the site. This mad money grab could have been interpreted as the symptom of a site in trouble. It's no secret that the windfall of internet advertising revenue has never materialized, causing the recent failure of many mega sites.

The most recent change in MP3.coms' policy was the launching of "Premium Service". The new "Premium" policy was an effort, in my opinion, to weed out the riffraff from the site. Artists wishing to participate in the Pay for Play program are required to pay 19.95 per month to to be eligible for any payout for music downloads. It is generally felt among artists on this site that it was another screw job by the bean counters at mp3c. This opinion was expressed in conversations with two moderately successful mp3 artists that shall remain anonymous for now.

Here's how the payout used to work. MP3.com would pay out one million dollars a month to be split between all of the artists on the site. The amount that each artist earned was calculated by the infamous "secret formula". (Don't even ask, 'cause nobody has figured it out yet). The earnings for each artist are posted on each artist page, right under their picture, for all the world to see. Cool eh? Post your music, give it away and mp3.com pays you big bucks. Everybody's happy.

Here's how it works now. MP3.com pays out one million dollars a month to be split between all of the artists on the site. The amount that each artist earns is calculated by the infamous "secret formula". The earnings for each artist are posted on each artist page, right under their picture, for all the world to see. So far, so good. Now the kicker; Premium Service. If anyone wants the earnings shown, they must pay 19.95 a month to get it. The real screw job comes in when the money is divvied up. The money is still split among all of the artists, even though it will only be paid out to the ones that are paying mp3.com. I don't know the number of artists that have signed up for premium, but I'd be surprised if it was 10% of them. Now mp3.com only pays out a fraction of the million and is earning 19.95 a month to boot!

Another policy change involves the sale of "DAM" (digital audio music) CDs on mp3.com. In the past mp3.com would press a cd of your music and offer it for a price that you set, somewhere between $6.99 and $30 bucks. For this, mp3.com would take half and you would take half. A Simple 50/50 split. The new policy adds a "production fee" of $3.99 to each CD. For example, if you previously had your price set at 10 bucks, mp3.com will automatically add 3.99 to your price. Now the cd costs $13.99. You take 5 dollars and they take $8.99. This leaves you with about 36% and they walk with 64%.

Remember that MP3.com has promised more of the same. There will be no policy changes, only great things can come of this. Yadda, yadda ... Great things for who? This doesn't make me feel any better.

Here's is the bottom line. I had music on mp3.com before they got a modest investment to build the current site. This was before Napster or any of that. The artists that were on the site talked with the founders all of the time then. Michael Roberson, Rod Underhill and Michelle were the moderators of the their bbs! What I have to say next might surprise you with all of the bitchin' I just did. I have the highest regard for Michael and the founders of MP3.com!

The Michael Roberson that I know has taken on the RIAA to protect your rights to distribute your music on the internet. He has done this at great cost to himself and his fledgling company through many court battles. The guy is a believer in indie music! This is why I don't believe that Michael runs mp3.com anymore. The share holders are in charge now and the vision is lost.

It's possible that Michael has sold out so that he can finally realize his vision. He will have a huge pile of cash to accomplish this. I can only hope that this is the case, or we're all in for a rough ride.

Click here for the official statement from MP3.com