Cox Plays $45 Million MP3.com Tune

Apparently not batting an eye at the swirling winds of controversy that whistle around the Web music site MP3.com, Cox Interactive Media, Inc. announced Wednesday that it would invest $45 million (US$) in the company and form a joint-venture to create music-related Web sites.

The Atlanta, Georgia-based subsidiary of Cox Enterprises, Inc., a media company with interests in newspapers, TV, cable and radio said both companies will make an equal financial contribution to the new venture. Cox Interactive Media operates a network of 30 Web sites, many city-destination sites.

The two will contribute an equal amount towards the development of the joint-venture and there will be advertising and e-commerce revenue sharing arrangements between the venture and MP3.com.

Sparking A Music Revolution

Often portrayed by the company as the leader of a revolution, the messiah of the music-hungry masses, MP3.com owner Michael Robertson is a man who was in the right place at the right time -- and had the right vision.

Robertson bought the domain name in 1997 for $1,000, and not long after was obtaining $10 million in venture capital from industry giant, Sequoia Capital. The investment firm's general partner said that MP3 would do to music what Amazon did to books.

The technology - which utilizes data compression to distribute music over the Internet, already existed when Robertson purchased the domain, but he clearly recognized the commercial worth of allowing musicians - both established and budding - to put their music out on the Web and allow free downloads. Free, with the MP3 player hardware, that is.

The $40 billion a year recording industry has fought back tooth and nail. It has signed some established musicians to contracts that ban them from releasing their music over MP3.

Deciding to fight technology with technology, a recording industry association recently formed a Secure Music Digital Initiative that, ironically enough, is run by the man who helped supervise the creation of MP3.

IBM (NYSE: IBM) is conducting limited tests of its Electronic Music Management System, which is said to be able to deliver an entire album in minutes over cable-modem networks. Analysts say this technology could mount a serious challenge to the MP3 domination.

Clearly, Cox Interactive Media and MP3.com don't intend to sit around and wait for that to happen.