MP3.com Revenues Increase 24% Year-Over-Year to $21.8 Million For First Quarter 2001

- Pro-Forma EPS Improves By 77% Year-Over-Year to $0.03 Net Loss -



Conference Call Information

- First quarter 2001 results conference call scheduled today for

1:30 p.m. PDT

- Conference call open to all interested parties through a real-time audio

webcast at the MP3.com corporate web site www.mp3.com/investor and

www.prnewswire.com

- Conference call to be archived at www.mp3.com and www.prnewswire.com

through 6:00 p.m. PDT, May 17, 2001

- MP3.com investor relations web site: www.mp3.com/investor



Apr 26, 2001, 01:00 ET from MP3.com, Inc.

    SAN DIEGO, April 26 /PRNewswire/ -- MP3.com, Inc. (Nasdaq:   MPPP), the
 Internet's premier Music Service Provider (MSP), today reported net revenues
 totaling $21.8 million for the first quarter ended March 31, 2001, an increase
 of more than 24 percent compared with $17.5 million for the first quarter of
 2000.  The company posted revenues of $22.0 million for the fourth quarter of
 2000.
     Pro-forma net loss for the first quarter of 2001 was $2.2 million, or
 $0.03 per diluted share(1).  This compares with pro-forma net loss of
 $8.4 million, or $0.13 per diluted share, for the comparable period in
 2000(2), and pro-forma net loss of $3.1 million, or $0.05 per diluted share,
 for the preceding fourth quarter in 2000.  On a GAAP basis, net loss for the
 first quarter ended March 31, 2001, was $46.1 million, or $0.69 per diluted
 share, compared with a net loss of $18.1 million, or $0.28 per diluted share,
 reported for the first quarter of 2000 and $35.6 million, or $0.54 per diluted
 share, for the fourth quarter 2000.
     "This quarter we further strengthened our leadership position in the
 digital music space with an increasingly robust infrastructure and technology
 platform and the appropriate licenses from publishers and record labels,"
 stated Michael Robertson, chairman and chief executive officer.  "Staying
 ahead of the curve, we have been diligent in managing our product and
 operational costs associated with revenue targets while accelerating the
 diversification of new revenue sources and moving toward profitability, as
 evidenced by meeting our goal this quarter of achieving an overall improvement
 in pro-forma earnings per share.
     "We have made many bold technology and business decisions, as well as
 leveraged operational efficiencies that have allowed us to remain focused on
 developing and delivering a wide range of products and services demanded by
 consumers, artists and businesses alike," continued Robertson.  "With these
 moves we believe we have enhanced our growth prospects that will translate
 into increased shareholder value."
     _______________________________________________________________________
 
     (1)  Pro-forma net loss and net loss per share calculations for the first
          quarter 2001 include amortization of deferred compensation, but
          exclude amortization of goodwill and other intangible assets related
          to the MP3Radio.com L.L.C. acquisition, non-cash expenses that
          reflect the difference in amortization of prepaid multimedia royalty
          licenses using the straight line method versus the units of measure
          according to the terms of the license, and a charge related to the
          class-action and derivative shareholder lawsuits.
     (2)  Pro-forma net loss and net loss per share calculations for the first
          quarter of 2000 include amortization of deferred compensation, but
          exclude non-operating minority interest losses in an unconsolidated
          subsidiary, certain employee related costs, and a charge associated
          with acquisition-related costs specific to the TransComputing
          International Corporation (d.b.a. seeUthere.com) pooling transaction
          which was not completed.
     _______________________________________________________________________
 
 
 First Quarter 2001 Operating Highlights
 
 
 The MP3.com Business
 
     Throughout the quarter, the company continued to execute on its key
 strategies of building the technologies and partnerships that will deliver
 value-added premium services to businesses, artists and consumers while
 broadening its business model to incorporate new and innovative revenue
 streams.
 
 
 Premium Artist Services
 
     Consistent with its goal to develop diversified revenue streams, MP3.com
 rolled out its Premium Artist Services giving digital artists a wealth of
 online benefits for a monthly fee of $19.99.  Services for artists include
 professional online presentations, the potential for fast, more effective
 exposure to music fans and the option of eliminating banner ads on their
 artist pages.  All eligible artists and records labels can still place their
 music on MP3.com for free with the ability to access a variety of no-cost
 promotional and marketing tools.
 
 
 Business and Enterprise Services
 
     Business Music Services is gaining traction, as more businesses are
 recognizing the potential of a new, highly flexible, customizable, and
 economical alternative to managing in-store music and advertising by moving it
 to the web.  To the list of service and product offerings available to
 businesses through this service, we added on-hold music, messaging services
 and dual-zone programming.
     During the first quarter, MP3.com partnered with Crows Nest Entertainment
 (CNE) to streamline its sales efforts with CNE's installation and sales
 expertise in marketing MP3.com's Business Music Services nationwide.  In
 addition, In-Store Broadcast Networks signed with MP3.com extending the
 company's VAR network.
     MP3.com's Music Licensing Program was launched in February in response to
 numerous requests to provide music for a variety of entertainment, advertising
 and other multimedia projects.  Created to facilitate the licensing of music
 posted by MP3.com's artist community, this new program matches content from
 digital artists and composers on the site with producers, directors,
 advertising agencies and music supervisors actively looking to license music
 for traditional or multimedia productions.  Artists can enroll in the program
 for an annual fee of $25.  To date, more than 2,000 artists have taken
 advantage of this new service and nearly 40,000 songs are available for
 licensing.
 
 
 International Expansion
 
     In a move to serve artists, advertisers and music consumers in Asian
 markets, MP3.com launched its Asian Group.  This new global effort is expected
 to combine local language sites with digital music content and services
 specific to Asian markets, and to provide locally relevant services through
 technology, content and marketing partnerships.
     Japan.mp3.com became MP3.com's latest international offering bringing
 digital music to a global audience.  Officially launched this month with the
 Being Group/BMF, one of Japan's major record companies, privately-held BMF has
 produced many major Japanese artists whose CDs consistently rank among Japan's
 top sellers.  With the local expertise of Being Group -- all aspects of the
 music business ranging from production, distribution, marketing and insights
 into the Japanese music consumers -- this partnership has proven invaluable in
 launching this new web site.  When launched, Japan.mp3.com offered nearly
 1,000 bands from Japan and thousands of full-length CD quality songs available
 for free.  Asia Global Crossing provides internet-provider bandwidth from
 Tokyo to the United States to help manage the potentially massive amounts of
 music content.
     International efforts in Europe are steadily moving forward.  Our strategy
 of identifying partnerships and business ventures that leverage the company's
 core technology competencies and assets while minimizing the need for human
 intervention and hopefully creating high margin offerings, is proving to be a
 persuasive combination to continue growing our digital music leadership
 position globally.
 
 
 Key Metrics
 
     MP3.com continues to be one of the most popular web sites in providing
 digital artists promotional and marketing opportunities for their music, as
 well as giving music fans access to one of the largest music catalogs on the
 Internet.  Along with consistent growth in digital artists and content,
 MP3.com reached a record 14.5 million registered users during the first
 quarter.
 
     -- Approved artists grew to 150,600 as of March 31, 2001 representing a
        4.3 percent increase over the previous month and a 141.7 percent
        increase over the same period one year ago.  For the first quarter, an
        average of over 280 new artists posted their music to MP3.com every
        day.
     -- Content grew more than 21 percent quarter-over-quarter reaching over
        967,000 song and audio files at the end of the 2001 first quarter.
        This represents an increase of nearly 150 percent year-over-year.  More
        than 1,800 song and audio files continue to be added to the MP3.com web
        site on a daily basis.
     -- Over 174 million listens (song or audio files streamed or downloaded)
        were delivered during the first quarter compared with 74 million for
        the first quarter 2000 and 149 million for the fourth quarter 2000.
        For the month of March alone, more than 59 million listens were
        reported.
     -- During the first quarter, average daily visitor traffic grew to 845,000
        compared with 575,000 as reported for the same period a year earlier,
        and an increase of 95,000 visitors over the 750,000 reported during the
        fourth quarter 2000.
     -- Estimated pageviews delivered during the first quarter were 495 million
        compared with 393 million for the first quarter 2000 and 476 million
        for the previous fourth quarter in 2000.
 
     During 2000, MP3.com completed its transformation from a music web site to
 a company focused on developing its infrastructure and technology to create
 diverse revenue streams, as well as deliver digital music and associated
 products to a global audience.  As a result, the traditional key operational
 metrics currently reported monthly no longer accurately reflect this
 transition.  Beginning in the second quarter 2001, quarterly data will be
 provided for listens and the aggregate number of artists posting music to
 MP3.com.
 
 
 The Music InterOperating System - The Future of Music Technology
 
     In January 2001, MP3.com announced its Music InterOperating System (IOS)
 developed to connect various segments of the music industry for the first
 time.  Designed to allow the music industry to interoperate in ways previously
 unheard of by connecting retailers, labels, music players, and hardware and
 software tools, MP3.com is becoming a central and essential figure in every
 aspect of the digital music business.
     In a move to extend the Music IOS to a wireless world, in the first
 quarter the company established a developer relationship with QUALCOMM to
 create an application platform compatible with QUALCOMM's new Binary Runtime
 Environment for Wireless (BREW) applications platform to potentially enable
 the wireless delivery of digital music.
     One of the cornerstones of the Music IOS is the new MP3.com developers
 network, which serves as a resource for developers of next-generation products
 and services created to enable consumer access to personal music collections
 from a variety of web sites or web-enabled devices.  Developers now have
 access to the vast digital music content and online tools offered by MP3.com
 including its Beam-it application protocol interface (API).  Several developer
 partnerships and new products were introduced during the quarter which
 continue to add value to the music experience of users:
 
     -- The launch of Transfer2Device, a new service that gives portable
        devices instant access to the huge catalog of song and audio files on
        MP3.com's web site.
     -- MP3 Messenger is a successful delivery mechanism that brings customized
        music selections directly to consumers with a choice of receiving
        full-length streaming song links, 30-second song samples or full-length
        mp3 song files.
     -- InterVideo, Inc. and MP3.com came together to provide enhanced mp3
        features allowing users to experience a greater variety of visual
        information than is currently available with today's digital music.
        Music fans can view synchronized lyrics and browse artist web pages
        through links embedded directly into standard mp3 files.
     -- Developer access to MP3.com's Beam-it API software application lets
        consumers instantly add licensed portions of their personal CD
        collection to an online music account without the hassle of ripping,
        encoding or uploading CD song files.
 
     "Our Music IOS strategy and developers network provide a valuable resource
 to on-line businesses and manufacturers looking to drive traffic and generate
 potential future revenue," said Robertson.  "Our recently released developers
 network has yielded over 4,000 software and hardware developers who have
 signed up to support our technology.  In addition, our Development Conference
 held this month encouraged the exchange of information, ideas, and
 technologies by programmers and developers.  Just one of the areas discussed
 was the integration of Beam-it and Instant Listening, as well as other product
 offerings, by web sites, software players and hardware vendors which offer
 consumers a groundbreaking service that adds value and dimension to any
 product or service."
 
 
 Management Update
 
     Earlier in the quarter, Derrick R. Oien, formerly the company's vice
 president of operations, moved into the position of senior vice president and
 chief operating officer reporting to MP3.com's president, Robin Richards.  Mr.
 Oien manages the day-to-day operations at the company and focuses his efforts
 on increasing overall efficiencies throughout MP3.com.  Also, Bruce Worman,
 formerly vice president of finance, has become senior vice president of
 finance reporting to MP3.com's executive vice president and chief financial
 officer Paul Ouyang.  Mr. Worman will manage all day-to-day finance and
 accounting operations.
 
 
 Shareholder Class Action and Derivative Lawsuit Settlements
 
     MP3.com recently entered into settlement agreements in connection with
 pending class action and derivative lawsuits for an aggregate of $35.0 million
 in cash and 2.5 million shares of MP3.com common stock valued at approximately
 $5.4 million.  The company expects to receive the required approvals from both
 the State and Federal Courts in the next several weeks.  The company is
 seeking to recover the full amount of these settlements from its insurance
 carriers.
 
 
 Quarterly Conference Call
 
     Information not covered in this press release may be discussed in our
 quarterly conference call scheduled for 1:30 p.m. PDT today.  To listen to
 MP3.com's quarterly conference call covering its first quarter 2001 financial
 and operating results, interested parties can access a real-time audio web
 broadcast at the MP3.com corporate web site, www.mp3.com and
 www.prnewswire.com.  For those unable to listen to the live broadcast, the
 call will be archived at www.mp3.com and www.prnewswire.com until 6:00 p.m.
 PDT, May 17, 2001.
 
 
 About MP3.com
 
     MP3.com, Inc. has created a unique and robust technology infrastructure
 designed to facilitate the storage, management, promotion and delivery of
 digital music.  As the Internet's premier Music Service Provider (MSP), the
 company is dedicated to giving consumers music when they want it and where
 they want it, using any web-enabled device.  The company's web site hosts what
 MP3.com believes is the largest collection of digital music available on the
 Internet, with over 967,000 song and audio files posted from more than 150,000
 digital artists and record labels.  Dedicated to growing the digital music
 space, the company's products and services include on-demand subscription
 music channels, an innovative business music services program, a syndicated
 radio division and others.  Additionally, through the company's MSP technology
 initiative and its Music InterOperating System, MP3.com is partnering with a
 variety of forward-looking businesses to expand its digital music strategy.
 MP3.com's common stock is listed for trading on the Nasdaq National Market
 under the ticker symbol MPPP.  The company is based in San Diego, California.
 For more information on MP3.com, visit www.mp3.com.
 
     Statements in this press release that are not strictly historical are
 "forward-looking" statements within the meaning of Section 27A of the
 Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
 Such statements include references to expected growth in content and other
 metrics on the MP3.com web site; activities and events expected to occur in
 connection with the company's various business groups, products, services, and
 technological initiatives; the company's MSP and Music IOS business activities
 and strategic partnerships; the company's anticipated expansion
 internationally; and activities related to copyright lawsuits and other legal
 proceedings.  These statements involve a high degree of risk and uncertainty,
 are only predictions, and actual events or results may differ materially from
 those projected in such forward-looking statements.  Factors that could cause
 or contribute to differences include risks related to the company's various
 litigation proceedings, including but not limited to the risk that all such
 proceedings may not be resolved favorably for MP3.com; uncertainty that the
 digital online music and related industries will not grow as projected;
 uncertainty regarding the company's ability to build and sustain its
 technology, music and content infrastructure; the company's new and uncertain
 business model; uncertainty with regard to expected growth or changes in
 MP3.com's online music metrics, including industry or company changes with
 regard to the calculation of such metrics; uncertainty regarding acceptance of
 the company's products and services, including market acceptance of the
 My.MP3, Music IOS and related services; and the company's limited operating
 history and risks associated with the company's rapid growth.  All of these
 risks and uncertainties referenced are more fully detailed from time to time
 in the company's reports to the Securities and Exchange Commission, including
 its report on Form 10-K for the year ended December 31, 2000 and any
 subsequent reports on Form 10-Q.
     The accompanying condensed consolidated statements of operations and
 balance sheets are an integral part of this announcement.
 
 
                                 MP3.com, Inc.
           Unaudited Consolidated Pro-Forma Statements of Operations
                (in thousands, except share and per share data)
 
                                               For The Three Months Ended
                                                March 31,      March 31,
                                                  2001           2000
 
     Revenues                                    $21,750        $17,495
     Cost of revenues                              3,054          3,756
     Gross profit                                 18,696         13,739
 
     Operating expenses:
     Selling and marketing                        10,491         10,420
     Engineering and product development           5,595          5,279
     General and administrative                    5,556          7,762
     Amortization of deferred compensation           971          4,402
     Total operating expenses                     22,613         27,863
     Operating loss                               (3,917)       (14,124)
     Interest income, net                          1,700          5,678
     Loss before income tax                       (2,217)        (8,446)
     Benefit for income tax                           --             --
     Pro-forma net loss                          $(2,217)       $(8,446)
 
     Pro-forma loss per share:
     Basic and diluted loss per share             $(0.03)        $(0.13)
     Weighted avg. shares outstanding         66,929,000     64,628,000
 
     Note 1:  Pro-forma results for the quarters ended March 31, 2001 and 2000
 are presented for informational purposes only and are not prepared in
 accordance with generally accepted accounting principles.  These results
 present the operating results of MP3.com, excluding the following:
 
     -- During the three months ended March 31, 2001, amortization expense for
        certain prepaid multimedia royalty licenses of $1,821,000 representing
        the excess amount of straight-line amortization over units of measure
        according to the financial terms of the license agreements.  This
        charge would be included in cost of revenues.
     -- During the three months ended March 31, 2001, a charge of $41,428,000
        related to the class action and derivative shareholder lawsuits. This
        charge would be included in operating expenses.
     -- During the three months ended March 31, 2001, amortization of goodwill
        related to our acquisition of the remaining 53.5% of MP3Radio.com
        L.L.C. from Cox Interactive Media, Inc. of $662,000.  This amortization
        would be included in general and administrative.
     -- During the three months ended March 31, 2000, non-operating minority
        interest losses in an unconsolidated subsidiary of $1,405,000.
     -- During the three months ended March 31, 2000, employee related costs of
        $6,583,000 of which $6,030,000 is non-cash. All of these costs relate
        to selling and marketing.
     -- During the three months ended March 31, 2000, a charge of $1,704,000
        associated to acquisition-related costs related to the TransComputing
        International Corporation (d.b.a. seeUthere.com) pooling transaction
        which was not completed.  These costs would be included in general and
        administrative.
 
 
                                 MP3.com, Inc.
                     Condensed Consolidated Balance Sheets
                                 (in thousands)
 
                                                 March 31,   December 31,
                                                   2001          2000
                                                (Unaudited)
     Assets
     Cash, cash equivalents & marketable
      securities                                 $91,211        $98,846
     Restricted cash                                  --         30,000
     Accounts and unbilled receivables, net        6,071          6,430
     Prepaid expenses and multimedia
      content royalties and other current
      assets                                      22,046         19,829
       Total current assets                      119,328        155,105
     Property and equipment, net                  19,428         20,270
     Strategic investments, net                   11,410         11,410
     Prepaid multimedia content royalties
      and marketing and promotion
      expenses and other assets                   49,200         51,814
     Total assets                               $199,366       $238,599
 
     Liabilities and stockholders' equity
     Accounts payable, line of credit,
      accrued litigation settlement
      costs, and accrued expenses                $62,930        $63,390
     Deferred revenues                             1,654          1,104
       Total current liabilities                  64,584         64,494
     Other liabilities                               427            389
 
     Total stockholders' equity                  134,355        173,716
     Total liabilities and stockholders'
      equity                                    $199,366       $238,599
 
     For further information please contact:  Karen A. Silva, Vice President -
 Investor Relations, of MP3.com, Inc., 858-623-7222, investor@MP3.com
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X98471385
 
 

SOURCE MP3.com, Inc.
    SAN DIEGO, April 26 /PRNewswire/ -- MP3.com, Inc. (Nasdaq:   MPPP), the
 Internet's premier Music Service Provider (MSP), today reported net revenues
 totaling $21.8 million for the first quarter ended March 31, 2001, an increase
 of more than 24 percent compared with $17.5 million for the first quarter of
 2000.  The company posted revenues of $22.0 million for the fourth quarter of
 2000.
     Pro-forma net loss for the first quarter of 2001 was $2.2 million, or
 $0.03 per diluted share(1).  This compares with pro-forma net loss of
 $8.4 million, or $0.13 per diluted share, for the comparable period in
 2000(2), and pro-forma net loss of $3.1 million, or $0.05 per diluted share,
 for the preceding fourth quarter in 2000.  On a GAAP basis, net loss for the
 first quarter ended March 31, 2001, was $46.1 million, or $0.69 per diluted
 share, compared with a net loss of $18.1 million, or $0.28 per diluted share,
 reported for the first quarter of 2000 and $35.6 million, or $0.54 per diluted
 share, for the fourth quarter 2000.
     "This quarter we further strengthened our leadership position in the
 digital music space with an increasingly robust infrastructure and technology
 platform and the appropriate licenses from publishers and record labels,"
 stated Michael Robertson, chairman and chief executive officer.  "Staying
 ahead of the curve, we have been diligent in managing our product and
 operational costs associated with revenue targets while accelerating the
 diversification of new revenue sources and moving toward profitability, as
 evidenced by meeting our goal this quarter of achieving an overall improvement
 in pro-forma earnings per share.
     "We have made many bold technology and business decisions, as well as
 leveraged operational efficiencies that have allowed us to remain focused on
 developing and delivering a wide range of products and services demanded by
 consumers, artists and businesses alike," continued Robertson.  "With these
 moves we believe we have enhanced our growth prospects that will translate
 into increased shareholder value."
     _______________________________________________________________________
 
     (1)  Pro-forma net loss and net loss per share calculations for the first
          quarter 2001 include amortization of deferred compensation, but
          exclude amortization of goodwill and other intangible assets related
          to the MP3Radio.com L.L.C. acquisition, non-cash expenses that
          reflect the difference in amortization of prepaid multimedia royalty
          licenses using the straight line method versus the units of measure
          according to the terms of the license, and a charge related to the
          class-action and derivative shareholder lawsuits.
     (2)  Pro-forma net loss and net loss per share calculations for the first
          quarter of 2000 include amortization of deferred compensation, but
          exclude non-operating minority interest losses in an unconsolidated
          subsidiary, certain employee related costs, and a charge associated
          with acquisition-related costs specific to the TransComputing
          International Corporation (d.b.a. seeUthere.com) pooling transaction
          which was not completed.
     _______________________________________________________________________
 
 
 First Quarter 2001 Operating Highlights
 
 
 The MP3.com Business
 
     Throughout the quarter, the company continued to execute on its key
 strategies of building the technologies and partnerships that will deliver
 value-added premium services to businesses, artists and consumers while
 broadening its business model to incorporate new and innovative revenue
 streams.
 
 
 Premium Artist Services
 
     Consistent with its goal to develop diversified revenue streams, MP3.com
 rolled out its Premium Artist Services giving digital artists a wealth of
 online benefits for a monthly fee of $19.99.  Services for artists include
 professional online presentations, the potential for fast, more effective
 exposure to music fans and the option of eliminating banner ads on their
 artist pages.  All eligible artists and records labels can still place their
 music on MP3.com for free with the ability to access a variety of no-cost
 promotional and marketing tools.
 
 
 Business and Enterprise Services
 
     Business Music Services is gaining traction, as more businesses are
 recognizing the potential of a new, highly flexible, customizable, and
 economical alternative to managing in-store music and advertising by moving it
 to the web.  To the list of service and product offerings available to
 businesses through this service, we added on-hold music, messaging services
 and dual-zone programming.
     During the first quarter, MP3.com partnered with Crows Nest Entertainment
 (CNE) to streamline its sales efforts with CNE's installation and sales
 expertise in marketing MP3.com's Business Music Services nationwide.  In
 addition, In-Store Broadcast Networks signed with MP3.com extending the
 company's VAR network.
     MP3.com's Music Licensing Program was launched in February in response to
 numerous requests to provide music for a variety of entertainment, advertising
 and other multimedia projects.  Created to facilitate the licensing of music
 posted by MP3.com's artist community, this new program matches content from
 digital artists and composers on the site with producers, directors,
 advertising agencies and music supervisors actively looking to license music
 for traditional or multimedia productions.  Artists can enroll in the program
 for an annual fee of $25.  To date, more than 2,000 artists have taken
 advantage of this new service and nearly 40,000 songs are available for
 licensing.
 
 
 International Expansion
 
     In a move to serve artists, advertisers and music consumers in Asian
 markets, MP3.com launched its Asian Group.  This new global effort is expected
 to combine local language sites with digital music content and services
 specific to Asian markets, and to provide locally relevant services through
 technology, content and marketing partnerships.
     Japan.mp3.com became MP3.com's latest international offering bringing
 digital music to a global audience.  Officially launched this month with the
 Being Group/BMF, one of Japan's major record companies, privately-held BMF has
 produced many major Japanese artists whose CDs consistently rank among Japan's
 top sellers.  With the local expertise of Being Group -- all aspects of the
 music business ranging from production, distribution, marketing and insights
 into the Japanese music consumers -- this partnership has proven invaluable in
 launching this new web site.  When launched, Japan.mp3.com offered nearly
 1,000 bands from Japan and thousands of full-length CD quality songs available
 for free.  Asia Global Crossing provides internet-provider bandwidth from
 Tokyo to the United States to help manage the potentially massive amounts of
 music content.
     International efforts in Europe are steadily moving forward.  Our strategy
 of identifying partnerships and business ventures that leverage the company's
 core technology competencies and assets while minimizing the need for human
 intervention and hopefully creating high margin offerings, is proving to be a
 persuasive combination to continue growing our digital music leadership
 position globally.
 
 
 Key Metrics
 
     MP3.com continues to be one of the most popular web sites in providing
 digital artists promotional and marketing opportunities for their music, as
 well as giving music fans access to one of the largest music catalogs on the
 Internet.  Along with consistent growth in digital artists and content,
 MP3.com reached a record 14.5 million registered users during the first
 quarter.
 
     -- Approved artists grew to 150,600 as of March 31, 2001 representing a
        4.3 percent increase over the previous month and a 141.7 percent
        increase over the same period one year ago.  For the first quarter, an
        average of over 280 new artists posted their music to MP3.com every
        day.
     -- Content grew more than 21 percent quarter-over-quarter reaching over
        967,000 song and audio files at the end of the 2001 first quarter.
        This represents an increase of nearly 150 percent year-over-year.  More
        than 1,800 song and audio files continue to be added to the MP3.com web
        site on a daily basis.
     -- Over 174 million listens (song or audio files streamed or downloaded)
        were delivered during the first quarter compared with 74 million for
        the first quarter 2000 and 149 million for the fourth quarter 2000.
        For the month of March alone, more than 59 million listens were
        reported.
     -- During the first quarter, average daily visitor traffic grew to 845,000
        compared with 575,000 as reported for the same period a year earlier,
        and an increase of 95,000 visitors over the 750,000 reported during the
        fourth quarter 2000.
     -- Estimated pageviews delivered during the first quarter were 495 million
        compared with 393 million for the first quarter 2000 and 476 million
        for the previous fourth quarter in 2000.
 
     During 2000, MP3.com completed its transformation from a music web site to
 a company focused on developing its infrastructure and technology to create
 diverse revenue streams, as well as deliver digital music and associated
 products to a global audience.  As a result, the traditional key operational
 metrics currently reported monthly no longer accurately reflect this
 transition.  Beginning in the second quarter 2001, quarterly data will be
 provided for listens and the aggregate number of artists posting music to
 MP3.com.
 
 
 The Music InterOperating System - The Future of Music Technology
 
     In January 2001, MP3.com announced its Music InterOperating System (IOS)
 developed to connect various segments of the music industry for the first
 time.  Designed to allow the music industry to interoperate in ways previously
 unheard of by connecting retailers, labels, music players, and hardware and
 software tools, MP3.com is becoming a central and essential figure in every
 aspect of the digital music business.
     In a move to extend the Music IOS to a wireless world, in the first
 quarter the company established a developer relationship with QUALCOMM to
 create an application platform compatible with QUALCOMM's new Binary Runtime
 Environment for Wireless (BREW) applications platform to potentially enable
 the wireless delivery of digital music.
     One of the cornerstones of the Music IOS is the new MP3.com developers
 network, which serves as a resource for developers of next-generation products
 and services created to enable consumer access to personal music collections
 from a variety of web sites or web-enabled devices.  Developers now have
 access to the vast digital music content and online tools offered by MP3.com
 including its Beam-it application protocol interface (API).  Several developer
 partnerships and new products were introduced during the quarter which
 continue to add value to the music experience of users:
 
     -- The launch of Transfer2Device, a new service that gives portable
        devices instant access to the huge catalog of song and audio files on
        MP3.com's web site.
     -- MP3 Messenger is a successful delivery mechanism that brings customized
        music selections directly to consumers with a choice of receiving
        full-length streaming song links, 30-second song samples or full-length
        mp3 song files.
     -- InterVideo, Inc. and MP3.com came together to provide enhanced mp3
        features allowing users to experience a greater variety of visual
        information than is currently available with today's digital music.
        Music fans can view synchronized lyrics and browse artist web pages
        through links embedded directly into standard mp3 files.
     -- Developer access to MP3.com's Beam-it API software application lets
        consumers instantly add licensed portions of their personal CD
        collection to an online music account without the hassle of ripping,
        encoding or uploading CD song files.
 
     "Our Music IOS strategy and developers network provide a valuable resource
 to on-line businesses and manufacturers looking to drive traffic and generate
 potential future revenue," said Robertson.  "Our recently released developers
 network has yielded over 4,000 software and hardware developers who have
 signed up to support our technology.  In addition, our Development Conference
 held this month encouraged the exchange of information, ideas, and
 technologies by programmers and developers.  Just one of the areas discussed
 was the integration of Beam-it and Instant Listening, as well as other product
 offerings, by web sites, software players and hardware vendors which offer
 consumers a groundbreaking service that adds value and dimension to any
 product or service."
 
 
 Management Update
 
     Earlier in the quarter, Derrick R. Oien, formerly the company's vice
 president of operations, moved into the position of senior vice president and
 chief operating officer reporting to MP3.com's president, Robin Richards.  Mr.
 Oien manages the day-to-day operations at the company and focuses his efforts
 on increasing overall efficiencies throughout MP3.com.  Also, Bruce Worman,
 formerly vice president of finance, has become senior vice president of
 finance reporting to MP3.com's executive vice president and chief financial
 officer Paul Ouyang.  Mr. Worman will manage all day-to-day finance and
 accounting operations.
 
 
 Shareholder Class Action and Derivative Lawsuit Settlements
 
     MP3.com recently entered into settlement agreements in connection with
 pending class action and derivative lawsuits for an aggregate of $35.0 million
 in cash and 2.5 million shares of MP3.com common stock valued at approximately
 $5.4 million.  The company expects to receive the required approvals from both
 the State and Federal Courts in the next several weeks.  The company is
 seeking to recover the full amount of these settlements from its insurance
 carriers.
 
 
 Quarterly Conference Call
 
     Information not covered in this press release may be discussed in our
 quarterly conference call scheduled for 1:30 p.m. PDT today.  To listen to
 MP3.com's quarterly conference call covering its first quarter 2001 financial
 and operating results, interested parties can access a real-time audio web
 broadcast at the MP3.com corporate web site, www.mp3.com and
 www.prnewswire.com.  For those unable to listen to the live broadcast, the
 call will be archived at www.mp3.com and www.prnewswire.com until 6:00 p.m.
 PDT, May 17, 2001.
 
 
 About MP3.com
 
     MP3.com, Inc. has created a unique and robust technology infrastructure
 designed to facilitate the storage, management, promotion and delivery of
 digital music.  As the Internet's premier Music Service Provider (MSP), the
 company is dedicated to giving consumers music when they want it and where
 they want it, using any web-enabled device.  The company's web site hosts what
 MP3.com believes is the largest collection of digital music available on the
 Internet, with over 967,000 song and audio files posted from more than 150,000
 digital artists and record labels.  Dedicated to growing the digital music
 space, the company's products and services include on-demand subscription
 music channels, an innovative business music services program, a syndicated
 radio division and others.  Additionally, through the company's MSP technology
 initiative and its Music InterOperating System, MP3.com is partnering with a
 variety of forward-looking businesses to expand its digital music strategy.
 MP3.com's common stock is listed for trading on the Nasdaq National Market
 under the ticker symbol MPPP.  The company is based in San Diego, California.
 For more information on MP3.com, visit www.mp3.com.
 
     Statements in this press release that are not strictly historical are
 "forward-looking" statements within the meaning of Section 27A of the
 Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
 Such statements include references to expected growth in content and other
 metrics on the MP3.com web site; activities and events expected to occur in
 connection with the company's various business groups, products, services, and
 technological initiatives; the company's MSP and Music IOS business activities
 and strategic partnerships; the company's anticipated expansion
 internationally; and activities related to copyright lawsuits and other legal
 proceedings.  These statements involve a high degree of risk and uncertainty,
 are only predictions, and actual events or results may differ materially from
 those projected in such forward-looking statements.  Factors that could cause
 or contribute to differences include risks related to the company's various
 litigation proceedings, including but not limited to the risk that all such
 proceedings may not be resolved favorably for MP3.com; uncertainty that the
 digital online music and related industries will not grow as projected;
 uncertainty regarding the company's ability to build and sustain its
 technology, music and content infrastructure; the company's new and uncertain
 business model; uncertainty with regard to expected growth or changes in
 MP3.com's online music metrics, including industry or company changes with
 regard to the calculation of such metrics; uncertainty regarding acceptance of
 the company's products and services, including market acceptance of the
 My.MP3, Music IOS and related services; and the company's limited operating
 history and risks associated with the company's rapid growth.  All of these
 risks and uncertainties referenced are more fully detailed from time to time
 in the company's reports to the Securities and Exchange Commission, including
 its report on Form 10-K for the year ended December 31, 2000 and any
 subsequent reports on Form 10-Q.
     The accompanying condensed consolidated statements of operations and
 balance sheets are an integral part of this announcement.
 
 
                                 MP3.com, Inc.
           Unaudited Consolidated Pro-Forma Statements of Operations
                (in thousands, except share and per share data)
 
                                               For The Three Months Ended
                                                March 31,      March 31,
                                                  2001           2000
 
     Revenues                                    $21,750        $17,495
     Cost of revenues                              3,054          3,756
     Gross profit                                 18,696         13,739
 
     Operating expenses:
     Selling and marketing                        10,491         10,420
     Engineering and product development           5,595          5,279
     General and administrative                    5,556          7,762
     Amortization of deferred compensation           971          4,402
     Total operating expenses                     22,613         27,863
     Operating loss                               (3,917)       (14,124)
     Interest income, net                          1,700          5,678
     Loss before income tax                       (2,217)        (8,446)
     Benefit for income tax                           --             --
     Pro-forma net loss                          $(2,217)       $(8,446)
 
     Pro-forma loss per share:
     Basic and diluted loss per share             $(0.03)        $(0.13)
     Weighted avg. shares outstanding         66,929,000     64,628,000
 
     Note 1:  Pro-forma results for the quarters ended March 31, 2001 and 2000
 are presented for informational purposes only and are not prepared in
 accordance with generally accepted accounting principles.  These results
 present the operating results of MP3.com, excluding the following:
 
     -- During the three months ended March 31, 2001, amortization expense for
        certain prepaid multimedia royalty licenses of $1,821,000 representing
        the excess amount of straight-line amortization over units of measure
        according to the financial terms of the license agreements.  This
        charge would be included in cost of revenues.
     -- During the three months ended March 31, 2001, a charge of $41,428,000
        related to the class action and derivative shareholder lawsuits. This
        charge would be included in operating expenses.
     -- During the three months ended March 31, 2001, amortization of goodwill
        related to our acquisition of the remaining 53.5% of MP3Radio.com
        L.L.C. from Cox Interactive Media, Inc. of $662,000.  This amortization
        would be included in general and administrative.
     -- During the three months ended March 31, 2000, non-operating minority
        interest losses in an unconsolidated subsidiary of $1,405,000.
     -- During the three months ended March 31, 2000, employee related costs of
        $6,583,000 of which $6,030,000 is non-cash. All of these costs relate
        to selling and marketing.
     -- During the three months ended March 31, 2000, a charge of $1,704,000
        associated to acquisition-related costs related to the TransComputing
        International Corporation (d.b.a. seeUthere.com) pooling transaction
        which was not completed.  These costs would be included in general and
        administrative.
 
 
                                 MP3.com, Inc.
                     Condensed Consolidated Balance Sheets
                                 (in thousands)
 
                                                 March 31,   December 31,
                                                   2001          2000
                                                (Unaudited)
     Assets
     Cash, cash equivalents & marketable
      securities                                 $91,211        $98,846
     Restricted cash                                  --         30,000
     Accounts and unbilled receivables, net        6,071          6,430
     Prepaid expenses and multimedia
      content royalties and other current
      assets                                      22,046         19,829
       Total current assets                      119,328        155,105
     Property and equipment, net                  19,428         20,270
     Strategic investments, net                   11,410         11,410
     Prepaid multimedia content royalties
      and marketing and promotion
      expenses and other assets                   49,200         51,814
     Total assets                               $199,366       $238,599
 
     Liabilities and stockholders' equity
     Accounts payable, line of credit,
      accrued litigation settlement
      costs, and accrued expenses                $62,930        $63,390
     Deferred revenues                             1,654          1,104
       Total current liabilities                  64,584         64,494
     Other liabilities                               427            389
 
     Total stockholders' equity                  134,355        173,716
     Total liabilities and stockholders'
      equity                                    $199,366       $238,599
 
     For further information please contact:  Karen A. Silva, Vice President -
 Investor Relations, of MP3.com, Inc., 858-623-7222, investor@MP3.com
 
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 SOURCE  MP3.com, Inc.