Sony Inks Licensing Deal with MP3.com

San Diego-based MP3.com Inc. has made a deal with Sony Music Entertainment Inc. to license Sony's music catalog for use on the MP3.com Web site. That means every major recording studio but Universal has reached an agreement with the music site.

And MP3.com president Robin Richards said negotiations with Universal Music Group are currently under way.

"I will continue to work tirelessly to make this happen," he said. "I cannot predict when. I can only tell you that the effort is present on both sides." The agreement with Sony is a sign that the record labels are coming around to the idea of licensing their music for online consumption, said Phil Benyola, an analyst at St. Petersburg, Fla.-based Raymond James & Associates.

The way one popular function of the MP3.com site works, Benyola said, is that a user verifies that he owns a particular CD by putting that CD into his computer's CD drive. Then he can access any of the songs on that CD through any Internet-enabled device. At least that's what used to happen.

According to Richards, that function of the MP3.com site has been down for about three months. But customers have increasingly been exploring other music on the site, which includes some 500,000 songs from less well-known artists, he said.

Once MP3.com reaches an agreement with Universal (formerly Polygram Records), MP3.com customers will once again be able to access the music that they already own through the Web site.

Richards said MP3.com is waiting for the agreement with Universal because he doesn't want to make the music available piecemeal.

"I don't want people to have to come to the site and say, 'Which of my stars are on this label and which ones can I put in and which ones can't I put in?' " he said.

Richards wouldn't say how much the agreements with the record labels are costing MP3.com, but said that the company has set aside $150 million to pay for the licensing rights.

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