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MP3.com's Business Music Services Take to the Air -- Port

Like others of its kind, San Diego's MP3.com was recently snatched from the music service provider ether by a large music company. And like those others, business still goes on for the acquired until they can be completely assimilated.

MP3.com Thursday secured Minneapolis-St. Paul International Airport as a subscriber to its Business Music Services, a program in which organizations may license tunes from MP3.com's library of 150,000 artists for use inside their offices.

Specifically, the airport, through whose gates stream about 35 million people for flights all over the world each year, will play the music over its elaborate sound systems throughout the concourses, baggage claim, ticketing counters, walkways and parking structures. Through its relationship with Minneapolis firm Ambience Systems, the airport will receive MP3.com services in conjunction with other communications and sound systems technologies. MP3.com's service allows businesses to select music and advertising messaging for specific demographics by accessing a Web-enabled, password-protected MP3.com account. Financial terms of the deal were not disclosed.

The deal is a coup of sorts for MP3.com, which was acquired by media giant Vivendi Universal for $372 million in cash and stock May 21, because it demonstrates the degree to which airports are willing to incorporate alternative forms of technology into their daily operations -- the technology being the digital music delivery format known as the MP3, which has spawned a revolution in the music industry and a slew of lawsuits to boot.

The agreement is also indicative of New Economy businesses' strategies to tap transportation standbys for business, but not just for entertainment purposes; a number of technology providers -- such as Microsoft Corp. and IBM Corp. -- have stepped up to demonstrate how airports are prime testing grounds for wireless networking, whether it be via Bluetooth or Wi-Fi (802.11b).

Why the interest in coaxing airports to use groundbreaking technologies? Simple -- size and scale. Thirty five million is a lot of people heading through the airports gates each year and one can imagine what it's like at more heavily traveled venues such as Los Angeles' LAX and JFK in New York. Lots of people means more exposure for the technologies and if the standards are high enough, one can bet that consumers will expect to see wireless ports where they may use their Bluetooth-enabled laptops with the same ease travelers steal deals on airline tickets from priceline.com or the new Orbitz service.

For MP3.com's Business Music Services division, signing an airport is a success given that it's greatest customers to date have been Petco Pet Supplies, Thriftway Stores and Rubio's Baja Grill.

"This will be the largest single venue we have contracted to date." said Bob Simril, vice president of Business Music Services at MP3.com. "We're excited that the more than 150,000 artists MP3.com works with will have the opportunity to expose their music to such an immense and diverse audience. We believe the airport will benefit from the fresh and comfortable sounds they will experience with our service, as will travelers and employees."

Vivendi Universal's purchase of MP3.com put an end to one tumultuous and contentious pattern -- labels and artists suing music companies such as MP3.com and Napster -- and signaled the start of a new one whereby music service providers have been ceding the reigns to larger media conglomerates. Call it the changing of the guard, changing of the tune or what have you, but companies such as MyPlay, Launch Media, EMusic have learned to survive by playing nice and allowing themselves to be folded into successful companies instead of just plain folding. Analysts have seen the patterns as a maturation of the online music industry. To that end, new powers have emerged on the horizon with Vivendi, Sony Corp, and Yahoo! Inc. spearheading the new pressplay (formerly titled Duet) music subscription service program, and AOL Time Warner, RealNetworks Inc., BMG and EMI putting their chips on MusicNet, both of which are set to debut at summer's end.

In general, July is an important month for the online music industry this year, with the MP3 Summit set to get underway July 12-13 at the Price Center at the University of California in San Diego and Jupiter Media Metrix's Plug.InForum 2001, which will run July 23-24 at the Sheraton New York Hotel And Towers in New York City.