MP3.com Will Store CD Copies on its Site

San Diego-based MP3.com, a premier website for distributing the music of unsigned bands, has announced a new program called Beam-it, via which copies of commercial CDs will be stored at the site. The copies will be instantly available to customers who have purchased the music from affiliated online retailers, company officials said. About 40,000 CDs have already been archived on the site.

The purported goal is to create a central Internet content library that music lovers can tap into with any computer—in other words, making MP3.com a personal radio station or jukebox for registered users. MP3.com reportedly has a fairly robust security system that makes it difficult for people who don't own the music to gain access to it, but the recording industry is said to be upset by the fact that the whole program was undertaken without its consent, and will probably consider it a breach of copyright.

"We think the major labels must be fuming," said David Pakman, a senior VP of Redwood City, California-based myplay.com, a competing website whose users can create and share playlists of their favorite recordings—provided they don't play a CD's entire contents. Pakman's company pays royalties to the record labels that put out the CDs.

MP3.com's new Beam-it system works differently. Users put CDs in their computers and send digital copies to MP3.com, where they are stored in password-protected areas on the company's server computers. Only one user at a time can listen to the music, and then only in a streaming format that won't let the track be copied. Thus an MP3.com subscriber can access his or her own library remotely—from the office, for example—without having to lug around a pile of discs.

"We are not enabling things that consumers couldn't do before—we are just streamlining the process," said MP3.com chairman and CEO Michael Robertson. "We don't expect to get sued, because we look at this as really positive for the industry." Robertson said he expects the Beam-it service and the resulting relationship with online retailers to boost CD sales. Beverly Hills lawyer Ken Hertz, who sometimes consults with MP3.com, said he would be surprised if the recording industry didn't sue.

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