Michael Robertson can describe his revolutionary fervor for digital music in a single word: "busic."
To Robertson's 20-month-old son, Dad's computer isn't for writing memos and surfing the Net. It's a box that plays "busic, busic."
The boy belongs to a generation that gets music from PCs and the Internet, not just from radio and CDs.
"He'll jump on Dad's lap and point to the speakers hinged to the sides of the monitor, and demand some aural satisfaction," wrote Robertson in an editorial on MP3.com, his hub site for small bands online. "We must learn more about how [new listening habits] affect the buying of music, because in the end it's all about buying busic, busic."
Some call him a visionary. Others say he's a spinmeister. Robertson has built his reputation in the music industry with a business based on the audio format MP3. MP3 compresses sound files for easy sending over the Internet. Users can play the files on their PCs or portable players, and make their own CDs into MP3 files.
Robertson likes MP3 because it's an open standard. Sound files can be transferred easily from the Net to a PC and other devices, or listened to with free software.
Robert Lord, director of online strategies at Nullsoft, calls Robertson "the minister of MP3." Nullsoft makes the de facto standard MP3 player Winamp, and is a partner of MP3.com.
"Michael dared to question the fundamentals of the US$40-billion music industry long before mainstream media assimilated his point of view," says Lord. "He's an evangelist for the end user."
Robertson's site, based in San Diego, provides news about MP3, download how-tos, and software and hardware information.
The venture has expanded into a record label. Digital Automatic Music, or DAM, splits profits 50/50 with its bands, posts their songs in MP3 on the site and gives them Web space, makes their CDs, encourages them to keep their master recordings, and lets them break their contracts at will.
"If we're a no-lose place for artists" to put their music and get exposure, "then both artists and record labels will want to work with us," says Robertson. He and MP3.com got a vote of confidence in January, when the site landed $11 million in financing from high-profile venture capital firm Sequoia Capital.
Maybe it was the "emergency business cards" Robertson had printed at Kinko's in December.
"We see MP3.com as the Yahoo for the digital music business," says Mark Stevens, general partner with Sequoia Capital. The market will grow quickly, because of the "100 million PCs that can download MP3s" today, and the advent of low-cost players like Diamond Multimedia's Rio, he says.
Stevens says Robertson is "a smart guy, very driven, very much a visionary."
It's a vision the recording industry does not share. The powerful Recording Industry Association of America, a coalition of big record labels, isn't against the MP3 format, but it is fighting illicit MP3 files, said Tim Sites, RIAA senior vice president. The RIAA is encouraging technology companies to create their own platforms and make an "open standard for music security" through its Secure Digital Music Initiative.
The recording industry fears it will lose money using a format like MP3, because the format allows for high-quality duplication.
"Any Internet music entrepreneur needs a business model that is going to give some economic stability," says Sites. "The great unknown is how any company could survive and prosper using unprotected MP3s."
MP3s are generating some business today. Diamond Multimedia, Samsung, Saehan Information Systems, and other companies sell portable MP3 players. MP3 hub sites abound.
Well-known artists like They Might Be Giants and the Beastie Boys have released MP3 files, and more of the smaller record labels like DreamWorks, Rykodisc, SubPop, online record label GoodNoise, and sites like the Ultimate Band List are trying out the format to promote or sell music. Billy Idol even posted a couple of songs on MP3.com until his record label made him take them off, Robertson says. The Road To MP3.com
Robertson has tapped into the grassroots power behind MP3 to build his business, but he's the first to admit he "knew nothing" about the music business not so long ago. Robertson used a degree in cognitive science from the University of California at San Diego to start a digital camera software company that tanked before he started Z Company and its Web-based businesses, one of which is MP3.com.
Robertson discovered MP3 while checking out Web traffic reports, looking for the next big thing. He spotted a growing interest in MP3, found the owner of the MP3.com domain name, and paid him a thousand bucks for it.
Then-owner Martin Paul didn't know what MP3 was. He had just registered the Internic handle assigned to him -- his two initials and a number. "It was money well spent," Robertson says.
Robertson launched MP3.com in the fall of 1997 and saw 10,000 visitors the first day. Robertson scanned around for more content and found an "MP3 shopping mall" run out of the Netherlands with legal files and software, but minimal traffic. He paid $2,000 for the site and $1,000 a month for the previous owner to become webmaster.
Robertson started penning his now-famous sermons about MP3, and a portal was born.
"We're not adverse to being openly critical of the music industry," he said. Some of his harsher essays include "Why the Music Industry is to Blame for MP3*** Piracy" and "RIAA Rallies Artists Against MP3."
Some observers say Robertson overdramatizes the friction between MP3.com and the recording industry. Robertson says he's met with RIAA representatives and has "agreed to disagree." He's also penned more encouraging notes like "RIAA Moves Toward MP3".
Regardless, Robertson seems to enjoy the role of the underdog. At November's Webnoize '98 conference in Los Angeles, which brought together reps from all over the music industry, Robertson outfitted his crew in black T-shirts with the message, "Who invited these guys?"
"That was a shining moment for him," says Joanne Marino, editor in chief of online music magazine Webnoize, the event's sponsor. "We had people request he not be on a digital delivery panel," which was nicknamed the "fireworks panel." The panel included Jim Griffin of OneHouse, and representatives from Liquid Audio and AT&T's a2b music, which make proprietary digital delivery platforms. Getting Down to Business
The whole industry is watching the post-funding Robertson.
"I think it will be interesting to see how Robertson and MP3.com make the transition from activist to businessman," says Hilary Rosen, president and CEO of the RIAA.
Robertson is selling off the remaining parts of MP3.com's parent company, which include the Filez.com ftp search engine and Calendarz.com. Robertson recently hired away Billboard's new-media editor Doug Reece, and Robin Richards -- former COO of Tickets.com -- as his new chief executive.
Robertson's twin sister Michele Riley, who runs the DAM record label, says DAM was signing 50 to 70 bands a day soon after its launch last fall, and has signed about 3,500 artists altogether.
Unique visitors to MP3.com are up to 200,000 a day, and employees are up to 20. Robertson said he will "constantly expand the menu of things we do for artists." That could include interactive maps that show geographic locations where a band's songs have been downloaded the most, helping them target fans in certain areas and plan a tour, he says.
Riley says VH-1 contacted a band called 13 Stories, which has been on MP3.com since she started there last November. Another MP3.com band -- Chaz -- was invited to play the White House, and a few others have negotiated to be on soundtracks or in a CD catalogue.
"Historically, the music business [makes] all its money on a few big hits," says Nick DiGiacomo, a consultant who worked on SDMI.
But MP3.com hasn't spawned any bands as big as the Spice Girls. Not yet.
Robertson says his business model is so new that the old definition of success doesn't apply.
"How do you measure [success]? With our system, we're going platinum as a company," through the sum total of all the artists, he says.
Married to Betamax?
Is it wise to base a business around MP3 -- a single technology that could be eclipsed by another format?
MP3 will probably be around for awhile, since there's a ton of freeware tools created around it, says Eric Scheirer, editor of the MPEG-4 standard and a researcher at MIT's Media Lab.
"Maybe we'll end up with two distribution channels: a free one for small acts and hobbyists ... based around MP3, and a low-cost one with better quality based around AAC or MPEG-4," Scheirer wrote in a recent email. "I think a lot depends on where the content goes."
If users prove fickle, Robertson seems flexible. He posed the question in a recent editorial: "Is MP3.com destined for Betamax.com?"
As long as it involves an open standard, Robertson says he would gladly offer a different format, if users demanded it. "What we do care about at MP3.com is a level playing field."
HotBot has a marketing agreement with Z Company, the parent company of MP3.com. Wired Digital owns both Wired News and HotBot.
