MP3.com and Maverick Records Ink Deal
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After getting slapped with two lawsuits earlier this week and watching its stock value nosedive 14 percent following the Napster ruling, online music service MP3.com got some good news this week in the form of a glowing endorsement from Madonna's Maverick Records.
The home of big name artists Prodigy, the Deftones, and Jude, Maverick inked a distribution agreement to use MP3.com and MyMP3.com services to promote its roster of recording artists. Maverick ownership is shared by Warner Bros. and company founder Madonna.
Industry analysts are viewing the Maverick deal as indication that the recording industry is beginning to see online music companies as potentially legitimate vehicles for music distribution and reaching music consumers, and not just the music bandits they were originally portrayed as.
"Maverick believes that MP3.com represents an important step forward in the creative exploitation of recorded music, and we are excited to be working together," said Ronnie Dashev, chief operating officer of Maverick Records in a public statement. "This licensing agreement with MP3.com is one of a number of initiatives that we have underway to enhance music fans' experience."
But despite MP3.com's recent efforts to regain equilibrium through deals with major record companies and business-to-business ventures, the company took a major hit Tuesday when a U.S. District Judge ruled that MP3.com infringed on copyrights belonging to independent record label Tee Vee Toons Inc.
The judge ruled that Tee Vee Toons could request damages from MP3.com of up to $150,000 per infringement. Tee Vee Toons claims the music service infringed on more than 1,000 copyrighted songs belonging to its label.
This coupled with the $133 million debt MP3.com is still trying to pay to Warner Music Group, BMG, EMI, Sony Music Entertainment, and Universal Music Group for similar copyright infringement claims.
Tuesday also brought an even grimmer reality when MP3.com's insurance company also filed a lawsuit against the music service denying coverage based on what it says was misrepresentation of business intent and broken copyright law without the insurer's consent.
Westport Insurance is asking for a judicial declaration that it is not liable for any loss caused by the illegal acts of MP3.com.
Greg Wilfahrt, director of public relations for MP3.com said that representatives for the company had not yet seen paperwork regarding the Westport Insurance suit and that at this time the company had no comment.
The case with Tee Vee Toons is slated for a March 26 trial date.
MP3.com shares traded today at $2.88, down from a 52-week high of $33.50.