Magex is one of a crowd of competitors promising record labels and other copyright holders a way to protect their works from plunder by online pirates. The problem has led the recording industry to file several lawsuits targeting online companies, including a high-profile case against popular music-swapping service Napster.
Although record labels have united in opposing such services, the issue of online distribution has divided artists, some of whom argue that giving fans unfettered access to their work will boost their popularity and help them make more money. The band Limp Bizkit, for example, supports Napster and is on a tour sponsored by the company.
In backing Magex, McCartney signals his opposition to the free online music trade.
McCartney, who was knighted in 1997, was not available to comment.
Jeff Baker, McCartney's press officer, said today in an interview that the ex-Beatle chose to invest in Magex because "he has an interest in promoting and protecting music."
McCartney's investment follows an $80 million round of private equity funding that Magex completed in April.
Magex said today that the funding will be used to expand its product development and marketing. The company also wants to increase its international presence.
McCartney "has been active and concerned about copyright issues, and I'm sure he learned of us through his interest in protecting his own copyright," said Patrick Campbell, Magex's new chairman and CEO.
Campbell, formerly executive vice president at Ameritech and president of Columbia/Tristar Pictures' home video unit, recently replaced Peter Beverley as the company's top executive. Beverley will serve as vice chairman.
Campbell will work in the New York office overseeing the company's daily operations, while Beverley will continue to be responsible for its European operations.