The annual MP3 love-in gets underway Tuesday with the first of two days of the MP3.com Summit, a self-focused look at the state of the fledgling online music industry MP3.com helped birth.
While it rests in the eye of the MP3 storm, MP3.com can't command undying love from investors, musicians, and fans by its leadership alone. Wired News asked Net music insiders about what MP3.com will have to do to maintain its comfy position.
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Choose a focus, said Steve Grady, vice president of marketing for EMusic, an online music distributor that used to be called GoodNoise.
"[MP3.com] is a hub for the MP3 community. Where they really cut their teeth was on the news and editorial they were offering: a place people could come and find out about the latest software and get their angle on the latest controversy," Grady said.
"The challenge for MP3.com is that [eventually] MP3 may not be the buzzword."
The site will have to look at major changes in its content to appeal to a broader community of music consumers than just the early adopters, Grady said.
"It's hard to be all things to all people," he said. "It's hard to be an editorial site, a news site, a download site. You've got to focus on a few things to do it really well."
San Diego-based MP3.com is the pioneer Internet-based music distributor. The MP3 format has become the de facto audio standard for sending compressed digital music files over the Net.
It's the early favorite among legal distribution sites, with more than 56,000 songs from more than 11,000 artists on board. In addition to EMusic, Riffage.com and Mjuice are other contenders.
But in part because of MP3.com's diffused focus, Grady doesn't even consider it a direct competitor to EMusic.
"Our primary focus is for consumers not to have to wade through lots of garage bands and unknowns," Grady said. MP3.com needs to do the same, or head more into the editorial and portal sides of the business, he said.
An MP3.com musician who goes by the alias Atomly thinks that MP3.com is on the right track for future music distribution, but he wants more from his distributor. While he appreciates MP3.com's hands-off policy of giving bands room to play on the site, he said that at some point the company will have to become more of a promoter. "I'd say that the most important thing for 'labels' like MP3.com to focus on is developing indie acts. Right now, MP3.com is essentially a faceless entity that doesn't really take interest in what kind of music is posted on [its] site, which is kind of nice in the same way that it's nice how eBay lets you sell whatever you want," Atomly said.
"But at the same time, it would be great if MP3.com or a similar site would actually peruse the music of the musicians on their site and take some time to promote some of the smaller bands instead of focusing on people like Tori Amos and Alanis Morissette."
The musician, a 19-year-old from Minneapolis, said he's been writing songs for five years and now releases them all in MP3 format, in part at MP3.com. He also listens to most of his own music primarily in MP3.
Mark Hardie, senior analyst at Forrester, agreed with Atomly's evaluations.
"My questions of MP3.com are really, 'What are they going to be: a music label or ... a music retailer?' And they're not clearly answering that," said Hardie.
The company has to make a change that is going to make the consumer's experience better, Hardie said. "At some point in time they're going to have to change their model to throw out the stuff that they deem crappy."
MP3.com is now in a silent period for a planned initial public stock offering that could raise funds in the neighborhood of US$115 million, and wouldn't comment on the summit for this story.
Bill House is a songwriter/musician from Corona Del Mar, California, who offers his work through MP3.com.
"The challenge for MP3.com is to serve two masters. On the one hand, they need to draw listeners to the site, so they need to provide lists with an easier way to get to the good music. That's a big technical challenge."
House said that he's reaching listeners through MP3.com -- to the tune of 500 to 1000 downloads a week, more than he would reach with the radio play a label deal would get him.
He said independent labels have approached him after hearing his work on MP3.com.
MP3.com also has to serve artists, said House.
"They have to provide services to artists to entice artists to post their stuff there," House said. "To do that, they're going to have to find ways to provide more promotional benefits and a higher-quality product for their CDs," he said, such as retail-quality packaging, art, and liner notes, or giving artists a cut of ad banners that run with download pages.
"I think the future looks good for MP3.com," House said. "But the future looks good for other sites as well. This is a growing thing."
