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MP3.com, Cox to debut Net radio venture

Cox Interactive Media and MP3.com plan to form a new company to create a network of music portal sites.

Cox Interactive Media and MP3.com are planning to form a new company to create a network of music portal sites, the companies will announce today.

mp3radio.com logo The new company, to be called MP3radio.com, will launch in October and is an outgrowth of Cox Interactive Media's $45 million investment in MP3.com earlier this year, according to an advisory sent out by the companies late yesterday. The companies said at the time of the investment that they would form a joint venture.

"We think there's an opportunity to build affinity content around local radio stations with free music downloads of local artists," Peter Winter, president of Cox Interactive Media and chairman of MP3radio.com, said today. "[Local radio stations] have not been able to capture significant online market share in their markets. That's the fundamental objective."

MP3.com executives could not be reached for comment late yesterday.

MP3radio.com will build a network of music portals that will offer music downloads and streaming audio events focusing on seven popular radio formats: alternative, contemporary pop, country, adult contemporary, rock, urban, and urban adult contemporary. The company also is expected to partner with local radio stations to offer free downloads of local artists.

Cox Radio, a subsidiary of Cox Enterprises, which owns cable TV operations, newspapers, and broadcasting outlets, will serve as the first affiliate partner for MP3radio.com. Cox Radio owns nearly 60 radio stations in 12 markets. A formal announcement will be made at the National Association of Broadcasters' conference in Orlando, Florida.

Cox owns about 10 percent of San Diego-based MP3.com, the popular music download, news, and community site that went public in July. MP3.com takes its name from the popular MP3 (MPEG 1, Audio Layer 3) audio compression format.

The consumption of music online is expected to take off in the mass market in the next few years; it already enjoys great popularity among early adopters. As such, several large media companies are stepping up their online music efforts. Yesterday, Viacom's MTV Networks Online unit detailed plans for a separate Net music company.

America Online also has thrown its hat into the online music ring with the acquisitions of Net radio firm Spinner.com and music software maker Nullsoft earlier this year.

Meanwhile, Cox Interactive Media earlier this month invested $30 million in Tickets.com, an online concert ticket sales firm. The investment gives Cox Interactive Media access to another music-related venture, which will be integrated with MP3radio.com, Winter said. MP3radio.com affiliate stations will offer co-branded online concert ticket sales through Tickets.com, taking a percentage of the transaction, he said.

Excite@Home, the high-speed cable modem Net access venture partly owned by cable-TV operator Cox Communications, also recently took a stake in Tickets.com.

The MP3radio.com joint venture will be located in Atlanta and is expected to hire as many as 120 people. The company already has 15 employees on board, according to executives. Gregg Lindahl will serve as president and chief operating officer with David Scott as vice president of operations and Dot Rhyne serving as director of promotions and special projects.

In addition to streaming music and free audio downloads, MP3radio.com is expected to offer online CD sales, Webcasts, entertainment news, chats, and message boards.

MP3radio.com is in talks with several major online CD sales outlets and hopes to announce a deal within 30 days, Winter said.

"Streaming is cool, but you've got to do more," he said. "The market opportunity is larger than that."