Mp3.com

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This article by Barbara Fox was published in U.S. 1 Newspaper on

August 25, 1999. All rights reserved.

Internet Entrepreneurs, 20

Start an Internet company and get rich young. Starting

with Jason Olim, who founded CDNow in his parents’ basement, there

seems to be an never ending supply of stories about young

entrepreneurs

who took E-commerce companies public and became millionaires before

they turned 30.

Jim Milton, 20, wants to be in that category. He just finished his

sophomore year at Syracuse University and is majoring in

entrepreneurship,

but timing is everything, in the Internet start-up world, and his

idea couldn’t wait. He took a leave of absence to found the Digital

Music Corporation and has launched three sites so far,

http://www.audiosurge.com

(to provide an atmosphere where people can discover new music and

new bands), http://www.buymp3.com (to purchase the

music), and http://www.internetstereo.com (to explore

streaming

audio techniques other than MP3).

Can a 20-year-old get respect in the investment community? "The

level of respect comes from the fact that people my age who are both

Internet savvy and in tune with music understand something that older

people might not — online music purchase and promotion of new

artists," says Milton.

Referring to the public furor over using Mp3 to "steal"

established

bands’ music by downloading them for free, Milton says he is trying

"to use Mp3 as a legitimate vehicle for sales and distribution,

versus being used by pirates. We are targeting college students plus

a new wave of consumers who have not tried Mp3 yet, to introduce them

to digital music as something not inherently free."

He ticks off his offerings: his firm licenses music from established

new artists, will offer immediate download, and will offer secure

sales for the entire album. "We are going to use an audit trail

system to hold people accountable for those files," says Milton.

The software, by Cognicity, imprints a digital fingerprint — a

transactional watermark — when the music is bought. "A record

will be made of you as the first person to purchase the file. If the

file surfaces on another site or hard drive — you will be held

accountable."

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Mp3.com

His site contrasts with the more well-known Mp3 site,

http://www.mp3.com,

which offers mostly unknown bands a way to showcase their music.

Anyone

can download these bands for free, though that website is working

on a deal with ASCAP to track the download so artists can get

royalties,

no matter how minuscule.

So far, Milton has 400 songs on the free site (you can hear one

complete

song plus 30-second excerpts of other songs) and 140 songs on the

for sale site. He has three people working full-time doing database

programming. Two of Milton’s classmates from South Brunswick High

School, Robert Bahl and Brian Greenbaum, will work for the firm when

they go back to college.

Next, Milton plans to offer an innovative way of sampling and buying

the music by partnering with a hardware company. Buyers of an Mp3

player would receive free CD-ROMs with locked versions of albums

featured

on the website. The albums can be sampled and can also be purchased

directly from the CD-ROMs.

He predicts downloading music from the Internet will eventually be

referred to by a term that is "format agnostic," such as

E-music

or Digital Music, and has taken steps to secure the domain names for

those terms.

"Above all we want to become a profitable company," says

Milton,

who decided early on his entrepreneurial future. The son of an

independent

contractor and an insurance agent, he won a couple of invention

contests

in the second grade by devising an appliance to help children and

disabled people pour large containers of liquid. He studied piano,

taught himself the guitar, acquired his first Internet connection

at the age of 13. In high school he got very involved with the music

scene, promoted punk rock concerts from independent labels, and

watched

bands turn into acts.

From his father, he learned that what makes an entrepreneur different

is that an entrepreneur always finds a way to solve a problem.

Sometimes,

that means bringing in older heads. "That is something I invite,

because my vision is bigger than something I can do. I believe it

will be useful to have people who have been around helping me out

in any way possible. Says Milton: "I really do understand the

way young people feel about music. I am not a seasoned manager, but

as an entrepreneur I have the ambition."

— Barbara Fox

The Digital Music Company, 3 Junction Pond Lane,

South Brunswick 08852. Jim Milton, president. 732-329-0456; fax,

419-781-5067.


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