Chapter 12: The Temptation of $3 Billion

Previously, there were no very well-known genuine music websites on the Internet, and the ump format at this time seemed to represent genuine music, and the image was very positive. Pen & Fun & Pavilion www.biquge.info

However, the mp3 format was spontaneously labeled as pirated music by European and American netizens.

Not everyone in Europe and the United States is willing to support genuine copies, especially when piracy is everywhere and within reach, many people are unwilling to spend money to buy genuine copies.

But the concept of "piracy is wrong, piracy is wrong" is the consensus of everyone, and no one will shout: "I am proud of piracy, and I am proud to use genuine copyright!" ”。

European and American countries have a strong awareness of copyright protection, and the only popular MP3 format on the Internet does not support certificate encryption, so copyright protection is impossible.

When the UMP format is known to the public, it naturally stands on the side of justice and is supported by the public.

In particular, fans of some idol singers are very fanatical and take pride in buying genuine goods of their idols.

As the only well-known genuine music website, on the first day of the site, the network was once congested, and the website was paralyzed several times and could not be logged in.

At the same time as the website, umusic music player is the only playback software that supports ump format, which is available for free download on the umusic website.

uMusic Music Player is a free software that provides diversion downloads on a large number of software sharing sites, but there are still a lot of people who download it directly on the website.

In the end, the website was forced to temporarily close the direct download, and called on everyone to use the diversion website and P2P software download, which can be regarded as alleviating the network congestion of the website.

The website is a genuine music sales network, which supports three modes: online music radio, monthly online listening and direct purchase of songs through umusic music player.

Internet music radio stations are free to listen to, and more than a dozen channels with different music styles have been opened, but they can only be listened to passively, and they have to charge money for actively ordering songs.

After registering an account, you can listen to all the songs of umusic online through the umusic music player for $10 per month, but you can't download and store them.

Directly purchase songs through your account, download and store them on your computer and UMP-U100, an offline player that supports UMP, but you can only bind up to 5 offline devices, and more than 5 offline devices need to be unbound online to replace the bound offline devices.

On the first day of the website, more than 500,000 users were registered.

On day one, these users were incredibly enthusiastic, with an average of more than two downloaded songs per user, as well as a large number of on-demand and monthly subscribers, bringing the site more than $3 million in revenue.

The booming registration and spending situation immediately attracted the attention of a large number of venture capitalists, and the next day there were venture capitalists waving checks to inject capital.

These venture capitalists gave a valuation of more than $100 million for just one day of establishment, but they all refused to Umbrella Computer on the grounds that it had not yet established a company independently.

On the fifth day of its establishment, Amazon officially proposed the overall acquisition of Umbrella Computer and related UMP players and patent rights, giving an offer of up to $900 million!

At the same time, Amazon's plan to use $900 million to acquire a website that has only been established for 5 days immediately became hot news on the Internet.

Then a professional immediately gave a professional analysis: because the mp3 format was very firmly dominant in the online music playback market, and it had been free for everyone to use before September 1998, and no patent claims had been made, so the impetus for the development of other music formats on the Internet was not large, and there have been no competitors.

In September 1998, the Fraunhofer Institute sent a letter to several MP3 software developers stating that "the distribution or sale of encoders or decoders" required a license and demanded a patent fee.

At this time, there was a demand for new formats on the Internet, but it was still in its infancy.

The rights holder of the MP3 format did not expect to be so quickly challenged by the UMP format in terms of copyright protection!

Although the Fraunhofer Institute immediately responded, announcing that it would develop a new MP3Pro format that uses better compression techniques and supports certificate encryption.

However, it is a fact that the MP3 format technology is backward, and it was not developed with seamless upgrades in mind.

It can be expected that the MP3Pro format will not be perfectly compatible with the MP3 format, and the prospect of the new format is unpredictable.

In addition, it is difficult for a new format to challenge the status of the UMP format in a short period of time, and even if it does, it will be difficult to replicate such a rare publicity opportunity as UMP.

Once a new format emerges, it is also unknown whether it will be accepted by the market - there is not a need for many incompatible formats on the Internet.

It's inconceivable to grow and even dominate the paid music market before a new challenger emerges, so Amazon's $900 million bid isn't unacceptable.

However, what the capital market did not expect was that Umbrella Computer ruthlessly rejected Amazon's acquisition request - although the capital market is optimistic, it also believes that Amazon's acquisition request has given a sufficient premium.

The price of selling a song is $2, and the monthly subscription of a member is $10 for one person, how many registered members do you need, and how long does it take to operate to receive $900 million in revenue?

Even if the average member spends $50, it would take 18 million members to generate $900 million in revenue.

And how much profit can $900 million in revenue be?

Most of the revenue needs to be distributed to the music rights holders, and only a small part of the income can be withheld, excluding the operating expenses of the website, and the 90 million dollars in revenue can be left with 90 million profits.

Amazon is the largest shopping site in the United States, and it is acceptable to offer $900 million regardless of profits, as long as the acquisition can bring a lot of traffic and genuine music.

But it would be very irrational for Umbrella Computer to reject Amazon's $900 million offer.

At this time, there is no need for professionals to come out to analyze, this popular event with twists and turns and several reversals is comparable to the bloody plot of a TV series, which has aroused a lot of discussion and interest on the Internet.

There is a lot of talk on the Internet about Umbrella Computer, but the general view is that Umbrella Computer is too overestimated in terms of prospects, and the $900 million offer is not yet sold, how much will it take?

Is it that the umbrella computer company is crazy about money?

Or do you want to develop the genuine music market?

Even if it has a role in promoting the sales of the ump player hardware of the umbrella, you can also protect your own interests by signing an agreement with Amazon.

The sales of UMP hardware players do not contradict the promotion, so it is irrational to give up Amazon's $900 million acquisition price!

Just when the North American Internet was frantically discussing the rejection of Amazon's $900 million acquisition offer by Umbrella Computer, Microsoft, the world's largest company in terms of market capitalization and the leader of the American IT Internet technology company, also submitted a request to acquire the website.

On February 23, the tenth day of its establishment, Microsoft put forward the same requirements as Amazon, but the offer it gave shocked the attention of countless Europeans and Americans!

The same request for the acquisition and related UMP player and patent rights, Microsoft's offer has been raised to $3 billion!

The North American Internet has lost its voice for a while......