No Longer Singing the Blues

Something is absolutely clear about
: The company has an incredible amount of confidence.
Crippling lawsuits? No problem. A tough advertising market? No problem.
In fact, during the past few weeks, the stock has been surging – as other
dot-coms continue to plunge.

Of course, a big plus was the settlement with Universal Music Group,
amounting to about $53.4 million (Universal gets 3 million warrants to buy stock). With this, has licensing deals with the five main
record labels.

With legal clarity, can focus on its core business. Perhaps this is
why the company was able to strike a deal with David Bowie. Basically, he
is the first major label artist to allow fans to access his catalog on

No doubt, is showing tremendous strength. In the past quarter, net
revenues were $20.5 million, which was a 405 percent increase from the same
period a year ago. Losses were manageable at $6.1 million.

Other milestones include: more than 100,000 approved artists; 647,700 songs
and audio files; estimated quarterly page views of 418 million (up from 411
million in the prior quarter); and 103 million listens in the prior quarter. has also been savvy with new lines of business. There is, for
example, the Retail Music Program. This service allows retail stores to
better manage their music needs, handling such things as messaging,
advertising and of course, customization of the music selections. The model
is based on subscription payments.

Next, has a syndicated radio program. With this, radio stations can
select and manage music content from their Web sites. Features include:
event calendars, e-commerce and charts. has also shown success internationally. With minimal marketing, the
company has captured the #7 most trafficked entertainment site in Europe.
In fact, about 20% of artists are from Europe.

The vision of is to build the underlying infrastructure for online
music. For the most part, it is in place. Now, the company is ready to,
well, rock ‘n roll.

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