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Found 11 results

  1. A few days after music streaming service Grooveshark shut down and settled with the major record labels, the site was 'resurrected' by unknown people. While the reincarnation bears more resemblance to a traditional MP3 search engine than Grooveshark, the labels are determined to bring it down. Earlier this month the long running lawsuit between the RIAA and Grooveshark came to an end. Facing hundreds of millions in damages, the music streaming service settled the dispute for $50 million while offering an apology for the mistakes that had been made in the past. The record labels celebrated the outcome as a victory, but after a few days they had a new Grooveshark problem on their hands. A person naming himself “Shark†had launched a new music service using the familiar Grooveshark brand. Contrary to most press reports proclaiming a near-complete return of Grooveshark, the site itself appeared to be mostly an MP3Juices clone. However, the use of the Grooveshark name was enough to have the record labels worried. In a complaint filed under seal at the Southern District of New York, the labels are now suing the people behind Grooveshark’s reincarnation. The labels accuse the site’s operators of counterfeiting, trademark infringement, cybersquatting and copyright infringement and immediately applied for countermeasures to shut the site down. Earlier this week District Court Judge Deborah Batts sided with the labels, issuing the requested temporary restraining order as well as a seizure order directed at the site’s operators, hosting providers and domain registrar NameCheap. “There is good cause to believe that, unless the Defendants are restrained and enjoined by Order of this Court, immediate and irreparable harm will result from the Defendants’ ongoing violations,†the Judge writes. Under the temporary restraining order the site’s operators are barred from using Grooveshark trademarks and logos and it also prohibits hosting providers from working with the site. In addition, NameCheap was ordered to seize the domain until further notice. Letter to Namecheap Namecheap swiftly complied with the order and as a result the site’s domain names including are now inaccessible. The operator of the ‘new’ Grooveshark, however, is not impressed by the legal fireworks and will continue to run the site from the new domain name that was just launched. “I have one message for those responsible for this hostile take over: You will not stop us. We won’t give in to this type of bullying,†Shark informs us. “On the contrary! The harder you come at us the stronger we’ll fight, and now after this hit we’re more determined than ever to keep Grooveshark alive and kicking,†he adds. In addition to relocating to a new domain name Shark says he’s added several developers to his team. A few days ago the team released the much requested playlist feature and in the near future he hopes to make the entire project Open Source. And so a new game of Whac-A-Mole has started.
  2. A group of major record labels including Sony Music, Warner Bros. Records and Universal Music Group have filed a lawsuit against the operators of the popular MP3 download site MP3Skull. The labels accuse the site's owners of copyright infringement and demand millions in damages. Unauthorized MP3 download sites have been a thorn in the side of the music industry for many years, and a group of well-known labels are now targeting one of the biggest players in the market. The coalition of record labels including Capitol Records, Sony Music, Warner Bros. Records and Universal Music Group have filed a lawsuit against MP3Skull, currently operating from the Tonga based .to domain name. In the complaint filed at a Florida District Court (pdf) the studios describe MP3Skull as a business that’s designed and operated to promote copyright infringement on a commercial scale. “MP3Skull is a website that is devoted to the infringement of copyrighted sound recordings on a massive scale, from which Defendants derive substantial revenue every year,†the complaint reads. “At the core of MP3Skull is a database that, according to Defendants, contains millions of links to MP3 music files from around the Internet,†it adds. MP3Skull has been around for several years and lists links to popular music tracks scattered around the web, free of charge. The operators of the site are not publicly known but the labels note that the Russian Monica Vasilenko was previously listed in the site’s Whois information. Besides offering a comprehensive database of links to music tracks, the labels also accuse the site’s operators of actively promoting piracy through social media. Among other things, MP3Skull helped users to find pirated tracks after a takedown notice purge. “MP3Skull’s official Twitter and Facebook pages contain several communications from Defendants openly encouraging users to download obviously infringing files, links to which were removed following takedown requests from copyright owners,†the labels write. “On several occasions, Defendants outlined various workarounds that users could employ to download MP3 files because the site was ‘forced’ to ‘remove a huge amount of our searches’ following takedown requests from copyright organizations,†the add. As a result of its allegedly infringing activities the site has gathered a broad audience of millions of users, resulting in significant losses from the record labels. “As a direct result of Defendants’ widespread and brazen infringement of Plaintiffs’ copyrighted works, MP3Skull has become one of the most popular illicit music download sites on the Internet, attracting millions of users from the United States and generating significant revenue for Defendants.†The complaint list more than 100 popular tracks that are freely available on MP3Skull. This means that the site’s operators face over $15 million in statutory damages. Perhaps more importantly, given the anonymous nature of the site’s operators, is the broad preliminary injunction the record labels request. Among other things, the proposed measures would prevent domain registrars, domain registries, hosting companies, advertisers and other third-party outfits from doing business with the site. If granted, the MP3Skull operators will have a hard time keeping the site afloat in its current form.
  3. Major labels including Sony, Warner and Universal are suing a man after he allegedly obtained unreleased music created by some of their biggest stars. Following an FBI investigation the man was traced to Sweden, where he will stand trial next month for leaks related to artists including Nicki Minaj, Chris Brown and Mary J Blige. If there is one issue guaranteed to incense recording labels and artists alike it’s the premature public availability of pre-release music. Over the years leaks from popular artists have featured in countless online piracy cases, painted by the labels as some of the most damaging forms of unauthorized distribution. While some believe that leaks are useful for creating buzz, labels often argue that availability amounts to unfair competition and the undermining of an artist’s decision as to when and where content should be heard. Pre-release leaks can happen anywhere in the supply chain, usually towards the retail environment, but a case set to be heard next month is unusual in several respects, not least the point at which the music was obtained. Between 2010 and 2013 it’s alleged that unreleased music began leaking from industry-affiliated email accounts based in the United States. Tracks from some of the world’s biggest stars was targeted, including those from Nicki Minaj, Chris Brown and Mary J Blige. It’s claimed that the music began turning up in public after being sold to DJs worldwide, events which heralded the involvement of the FBI and a trail to Sweden. “In the United States an investigation was launched into the stolen songs. The tracks led to Sweden through bank accounts and IP addresses. Therefore, we were contacted,†says prosecutor Fredrik Ingblad. Further investigation led Swedish authorities to a 25-year-old local man who is said to have hacked the email accounts, obtained the music, and sold it on for a profit. “He hacked into the email accounts and got hold of unreleased songs, and songs that might have never been released. That makes this case unusual,†Ingblad adds. The prosecution claims that the man, who denies the charges, made around $12,000 from sales of the tracks. He will go on trial in Sweden next month and will face fines and up to two years in prison. Labels including Sony, Warner and Universal are suing the man and will be seeking damages.
  4. A long running legal battle between the world's largest record labels and an Irish-based ISP has resumed today. Sony, Universal and Warner want UPC to warn and disconnect subscribers found sharing infringing content online but the ISP doesn't want to foot the bill. Half a decade ago the Irish Recorded Music Association (IRMA) ended its legal action against local ISP Eircom when the ISP agreed to implement a new anti-piracy policy against its own subscribers. The agreement saw IRMA-affiliated labels including Sony, Universal and Warner tracking Eircom subscribers online. Eircom then forwarded warning notices to customers found to be sharing content without permission and agreed to disconnect those who were caught three times. In a follow-up move IRMA tried to force another ISP, UPC, to implement the same measures. UPC fought back and a 2010 High Court ruling went in the ISP’s favor. However, a 2012 change in the law emboldened IRMA to have a second bite and now the music group’s case is being heard by the Commercial Court. As before, IRMA wants an injunction issued against UPC forcing it to implement a “three strikes†or similar regime against its customers. According to the Irish Times, Michael McDowell SC representing the labels said that UPC could come up with its own graduated response, whether it be “two strikes†or “five strikesâ€. For its part, UPC appears to be more concerned about the cost of operating such a system rather than the actual introduction of one. UPC has provided estimates for doing so but the labels view the amounts involved as excessive. Surprisingly, Cian Ferriter SC, for UPC, said the ISP has “no difficulty in handing over information†(on pirates) for the labels to pursue but the company has issues with setting up an “entire system†to deal with the problem. The stance of UPC seems markedly different from its position during February 2014. At the time the company said that subjecting customers to a graduated response scheme would raise a “serious question of freedom of expression and public policy†and would “demand fair and impartial procedures in the appropriate balancing of rights.†In the event, however, Mr McDowell said that UPC’s offer was not only a new but one that raises concern over privacy and data protection issues. IRMA chairman Willie Kavanagh previously said that the Eircom three-strikes scheme had been “remarkably effective,†since only 0.2% of warned users have proceeded to the disconnection stage. Perhaps even more remarkable is that even after four years of the program, Eircom hadn’t disconnected a single customer. “We are continuing to implement the graduated response process,†a spokesman said last March. “We haven’t, as yet, disconnected anyone.†IRMA is contractually bound by its agreement with Eircom to pursue UPC and/or other ISPs to implement a graduated response scheme, so expect this one to run either until the bitter end – or when UPC cave in. For now the case is scheduled to run for eight days.
  5. Several record labels in the UK have today obtained a High Court order to have local ISPs block yet more torrent sites. Sky, TalkTalk, Virgin, BT and EE are now instructed to block a total of 21 sites including LimeTorrents, Seedpeer and Torlock. Justice Arnold rejected the sites' attempts at copyright compliance by describing their efforts as "lipservice." Having ISPs block file-sharing sites is a key anti-piracy strategy employed by major rightsholders in the UK. Both Hollywood-affiliated groups and the recording labels have obtained High Court orders alongside claims that the process is an effective way to hinder piracy. Last week these rightsholders were joined by luxury brand owner Richemont, which successfully obtained orders to block sites selling counterfeit products. The outcome of that particular case had delayed decisions in other blocking applications, including one put forward by the record labels. Today the High Court ended its hiatus by processing a new injunction. The application was made by record labels 1967, Dramatico Entertainment, Infectious Music, Liberation Music, Simco Limited, Sony Music and Universal Music. The labels represented themselves plus the BPI (British Recorded Music Industry) and PPL (Phonographic Performance Ltd) which together account for around 99% of all music legally available in the UK today. Through their legal action the labels hoped to disrupt the activities of sites and services they believe to be enabling and facilitating the unlawful distribution of their copyright works. In this case the key targets were the 21 torrent sites listed below: (1), (2), (3), (4), (5), (6), (7), (8), (9), (10), (11), (12), (13), (14), (15), (16), (17), (18), (19), (20) and (21) As usual the UK’s leading Internet service providers – Sky, Virgin, TalkTalk, BT and EE – were named as defendants in the case. The ISPs neither consented to nor opposed the application but participated in order to negotiate the wording of any order granted. In his ruling Justice Arnold noted that the sites listed in the application function in a broadly similar way to The Pirate Bay and KickassTorrents, sites that are already subjected to blocking orders. Perhaps surprisingly, efforts by some of the sites to cooperate with rightsholders meant little to the Court. “All of [the sites] go to considerable lengths to facilitate and promote the downloading of torrent files, and hence infringing content, by their users,†Justice Arnold wrote. “Although a few of the Target Websites pay lipservice to copyright protection, in reality they all flout it. Although a few of the Target Websites claim not to, they all have control over which torrent files they index.†Also of interest is that Court didn’t differentiate between sites that allow users to upload torrents, those that store them, or those that simply harvest links to torrents hosted elsewhere. “Thirteen of the Target Websites (,,,,,,,,,,, and do not permit uploads of torrent files by users, but gather all their links to torrent files using ‘crawling’ technology. No torrent files are stored on these websites’ own servers,†Justice Arnold explained. “Nevertheless, the way in which the torrent files (or rather the links thereto) are presented, and the underlying technology, is essentially the same as in the cases of the other Target Websites.†The Judge also touched on the efficacy of website blockades, citing comScore data which suggests that, on average, the number of UK visitors to already blocked BitTorrent sites has declined by 87%. “No doubt some of these users are using circumvention measures which are not reflected in the comScore data, but for the reasons given elsewhere it seems clear that not all users do this,†Justice Arnold wrote. Speaking with TF the BPI said that the 21 sites had been selected for blocking on the basis that they are amongst the most infringing sites available in the UK today. BPI Chief Executive Geoff Taylor said that having them rendered inaccessible would help both the music industry and consumers. “Illegal sites dupe consumers and deny artists a fair reward for their work. The online black market stifles investment in new British music, holds back the growth of innovative legal services like Spotify and destroys jobs across Britain’s vital creative sector,†Taylor said. “Sites such as these also commonly distribute viruses, malware and other unsafe or inappropriate content. These blocks will not only make the internet a safer place for music fans, they will help make sure there is more great British music in years to come.†Finally, and mirroring a decision made in the Richemont case, Justice Arnold said that Internet subscribers affected by the block will be given the ability to apply to the High Court to discharge or vary the orders. Furthermore, when blocked site information pages are viewed by ISP subscribers in future, additional information will have to be displayed including details of the parties who obtained the block. Add Rep and Leave a feedback Reputation is the green button in the down right corner on my post
  6. Following a complaint from Sony, Warner and Universal, the Italian Communications Regulatory Authority has ordered all local ISPs to block access to the popular torrent tracker Demonoid. The blockade was issued under new regulations which don't require legal overview, a process that may be ruled unconstitutional in the future. After 20 months of downtime the infamous Demonoid BitTorrent tracker came back onlineearlier this year. The site slowly started to rebuild its community and is now getting millions of visitors per month again. At the same time, however, the torrent site is also drawing attention from various copyright holders. On behalf of Sony, Warner and Universal, Italian anti-piracy group FIMI submitted a complaint against Demonoid to the Communications Regulatory Authority (AGCOM) last month. AGCOM is a regulatory body that has the power to order website blockades without court interference, if sites are deemed to be infringing. The labels’ complaint listed several tracks by Italian artists including Laura Pausini, Max Pezzali and Vasco Rossi, which were made available on Demonoid. However, instead of ordering blockades for these infringing works, AGCOM has now instructed ISPs to block the entire website. As a result, Italian Internet subscribers can no longer access Demonoid. TorrentFreak contacted Fulvio Sarzana, a lawyer specialized in Internet and copyright disputes, who told us that the scope of the preliminary injunction is too broad and disproportional. “The order, in my opinion, is not proportional. The Court of Rome repeatedly ruled that blocking orders must be directed only at illegal content, and not the whole site,†Sarzana says. The lawyer refers to a ruling earlier this year, where the Court of Rome recalled a blocking order against the video streaming site The Court argued that partial blocking of a specific URL is preferred over site-wide bans, something that clearly didn’t happen with Demonoid. “Demonoid would do well to contest the measure which appears to be illegitimate,†Sarzana notes, adding that the AGCOM procedures may be unconstitutional. This issue has also been raised by several consumer groups who asked the court to review AGCOM’s legitimacy. Earlier this week the Court of Rome referred these complaints to the Constitutional Court. Here it will be examined whether the current procedure violates right to freedom of expression and free speech, among other things. If AGCOM is indeed deemed to be unconstitutional there’s a good chance that all existing blockades will be lifted. In addition, Sarzana believes that the wrongfully blocked websites may then be entitled to receive compensation for the damages they suffered. However, until a decision from the Constitutional Court arrives AGCOM will continue to operate normally. FIMI is happy with this decision as well as the new blockades against Demonoid. “We are extremely satisfied with this new blocking order and also about the outcome of the decision from the administrative Court of Rome on the regulation,†FIMI’s Enzo Mazza tells TorrentFreak.
  7. The future of streaming music service Grooveshark is in doubt after a United States District Court issued summary judgment in one of the cases actioned by the major labels. In addition to a full house of copyright infringement charges against the service, its founders were also found liable for direct infringement. Beleaguered music service Grooveshark is facing its biggest threat yet after a long-running case with the major labels of the RIAA came to a close last evening. In a ruling by United States District Judge Thomas P. Griesa in the United States District Court in Manhattan, Grooveshark parent company Escape Media and two of the company’s top executives were found liable for infringing the rights of the labels on a grand scale. The summary judgment is not a pretty read. It summarizes Grooveshark’s history and how the service began with licensed aims in mind, but achieved that by infringing the labels’ rights in the hope of reaching deals later on. The initial problem was obtaining content to offer to users. The company solved the issue by getting employees to “seed†music to other users via its own P2P sharing software known as Sharkbyte. A 2007 email from co-founder Josh Greenberg to employees reads: Please share as much music as possible from outside the office, and leave your computers on whenever you can. This initial content is what will help to get our network started—it’s very important that we all help out! If you have available hard drive space on your computer, I strongly encourage you to fill it with any music you can find. Download as many MP3’s as possible, and add them to the folders you’re sharing on Grooveshark. Some of us are setting up special “seed points†to house tens or even hundreds of thousands of files, but we can’t do this alone… There is no reason why ANYONE in the company should not be able to do this, and I expect everyone to have this done by Monday… IF I DON’T HAVE AN EMAIL FROM YOU IN MY INBOX BY MONDAY, YOU’RE ON MY OFFICIAL SHIT LIST. In 2007, music obtained via Sharkbyte and other means was used to populate Grooveshark’s central music storage library. Internal company emails showed Greenberg, Tarantino and Escape’s senior programmer encouraging employees to bring in and download music so it could be uploaded to the company’s servers. By 2008 the Grooveshark service carried more than a million tracks, including thousands uploaded by Greenberg, Tarantino and other employees. That service grew by another million tracks and eventually into the streaming service available today. A year later the service was beginning to receive DMCA takedown notices but according to the decision handed down yesterday, the company had a solution to keep that content online. “Escape’s senior officers searched for infringing songs that had [been] removed in response to DMCA takedown notices and re-uploaded infringing copies of those songs to Grooveshark to ensure that the music catalog remained complete,†the decision reads. Furthermore, records show that thousands of the DMCA notices sent by the labels were forwarded internally to employees, including Greenberg and Tarantino, for the music they had personally uploaded. The fact that employees were uploading content became known to the labels following discovery in another case currently before the courts. While the Court accepted that Escape and its employees uploaded thousands of tracks, the huge numbers claimed by the labels were rejected. In total the Court found that the defendants are liable for uploading ‘just’ 5,977 copyright works. And, of course, there is the not insignificant number of tracks the company streamed to its users over the course of its operations. Escape’s own records show that it “streamed or publicly performedâ€, copies of plaintiffs’ copyrighted sound recordings at least 36 million times. “Each time Escape streamed one of plaintiffs’ song recordings, it directly infringed upon plaintiffs’ exclusive performance rights,†the decision reads. As a result of Greenberg and Tarantino instructing company employees to upload copyright-protected music to Grooveshark, the Court granted the labels’ motion for summary judgment on its claim for direct copyright infringement. On the secondary infringement front the Court ruled that Escape Media is liable for the direct infringements of the employees it instructed to upload music. “[The record labels] advance three theories of secondary liability: (1) vicarious copyright infringement, (2) inducement of copyright infringement, and (3) contributory copyright infringement. The court finds for plaintiffs on all three theories of liability,†the judgment reads. In respect of Escape’s co-founders, Tarantino and Greenberg, the Court found that they are not only “jointly and severally liable for Escape’s direct and secondary copyright infringement†but also liable for direct infringement due to their own personal uploads of infringing content to Grooveshark. The judgment concludes with an instruction for the parties to submit proposals on the scope of a permanent injunction against Grooveshark within 21 days. Escape Media has already announced its intention to appeal.
  8. In recent weeks various music industry groups have sent takedown requests targeting Kim Dotcom's album Good Times. IFPI and others claim that Dotcom's music infringes the rights of their artists, but it appears that they fell victim to a DMCA prankster. Earlier this year Kim Dotcom released his first music album “Good Times,†giving it away for free to anyone interested. An official copy of the album was posted on the cloud hosting service Mega, which is linked from Dotcom’s homepage. This has never caused any issues, until a few weeks ago, when various copyright holders started sending unusual takedown requests to have the content removed. IFPI, representing the major music labels, submitted several DMCA notices to Mega claiming that the file infringed the rights of various artists. This resulted in a game of whack-a-mole in which the album was removed and reinstated a few times. Currently it’s unavailable yet again. When we previously covered the issue, Mega stressed that the takedown requests were clearly mistaken. The company accused IFPI of not doing their homework and doubted the accuracy of their notices in general. However, since the takedown notices kept targeting the same link, there was a good chance that these mistakes were orchestrated in some way. Assuming that someone was making IFPI and others believe that the link pointed to albums of other artists, we decided to do some research. Eventually we stumbled upon a series of Pastebin pages where the URL of Dotcom’s album is linked to titles of other artists. Several of the artists mentioned in the pastes are the same as the one’s IFPI listed in their DMCA notices, so this would explain the mistakes. The above is concerning for several reasons. First of all, it shows that IFPI and others don’t verify the legitimacy of their takedown notices. This means that pranksters can easily get them to censor legitimate content. Secondly, Mega usually can’t check the validity of a claim, or it simply doesn’t know whether or not a user has permission to publish it. So they have very little options to stop the abuse. “Mega aims to process all takedowns promptly, within a few hours. It is impossible to verify the claims as the files are encrypted so we don’t know the contents (unless the full link is provided with the key included), and we can’t verify if the person has a valid ownership/license or not,†a Mega spokesperson told us. Despite these restrictions, the cloud hosting provider says it’s setting up a system where repeated takedowns can be flagged to prevent this type of abuse in the future. “We are improving our systems to monitor the takedown process and will eventually be able to identify repeated incorrect notices,†Mega says. Until then, Dotcom’s album will most likely disappear from Mega a few more times. Luckily for the fans, there’s also a copy hosted on the soon-to-be-released music service Baboom.
  9. In what could be one of the most ironic anti-piracy mistakes this year, music industry group IFPI has asked Mega to take down Kim Dotcom's very own music album Good Times. Mega was asked to remove its founder's music twice, casting doubt over the accuracy of the record labels' takedown efforts. Mega, the cloud hosting service founded by Kim Dotcom, has been growing steadily since its spectacular launch last year. Considering the controversial reputation of its predecessor Megaupload, copyright holders have been keeping a close eye on the site. Thus far, however, the number of takedown requests received by the company has been relatively small. Perhaps not completely unexpectedly, among the takedown requests that do come in are many that wrongfully request the takedown of perfectly legitimate files. This was illustrated earlier this week when Kim Dotcom’s official album Good Times was removed following a complaint. The album was released by Dotcom earlier this year and he has been sharing it via his website ever since. The link in question points to Mega where people can download it for free, but a few days ago it suddenly disappeared. To find out why the album was removed we contacted Mega for an explanation. The company informed us that music industry group IFPI requested the removal of Dotcom’s album through a takedown request sent on September 1. Representing the major record labels, IFPI claimed that the link infringed on the copyrights of one of their artists. IFPI listed several musicians but Kim Dotcom was not one of them. “It’s clearly an incorrect takedown request,†Mega’s Chief Compliance Officer Stephan Hall tells us. TorrentFreak also contacted Kim Dotcom, who asked Mega to reinstate the album, which they did. All in all the album was unavailable for about a day. While a mistake is easily made, this is not the first time that IFPI has tried to remove Dotcom’s album from Mega. A similar request was sent on August 18, this time claiming that it was a copyright infringement of Kimbra’s “The Golden Echo.†IFPI’s actions have been sloppy, to say the least, and Mega’s Chief Compliance Officer has little faith in the accuracy of the music group’s other takedown requests. “This is an indication that someone at the IFPI is not doing their homework and that their takedown notices in general cannot be trusted,†Hall tells TorrentFreak. Unfortunately these kind of mistakes are not an isolated incident. For example, before Kim Dotcom’s Megaupload was shutdown early 2012 the site received many erroneous takedown notices. “During the Megaupload days over 20% of all takedown notices were bogus,†Dotcom told us previously. “We analyzed big samples of notices and most were automated keyword based takedowns that affected a lot of legitimate files. The abuse of the takedown system is so severe that no service provider can rely on takedown notices for a fair repeat infringer policy.†A policy to punish copyright holders who make repeated mistakes, on the other hand, might be worth considering.
  10. Soundcloud caused controversy recently by letting Universal Records delete content and now it's becoming clear why. Soundcloud, Universal, Sony and Warner are said to be on the cusp of a deal, one in which the music hoster gives the labels royalties and up to 15% of its business in exchange for not getting sued. Anyone running a user-generated content site needs to seriously consider the implications of its users uploading infringing material, because it’s pretty much guaranteed to happen on a very large scale indeed. Once the world’s largest recording labels and movie studios see this happening, things can go bad quickly, unless certain preventative steps are taken. Bringing the business into line with the DMCA is a necessary first step, one which will see the hosting site respond to takedown notices in a timely fashion. Other sites have gone a step further. As underlined by the MegaSong debacle, YouTube gives some big record labels the right to take down content they don’t like, even if there are no apparent copyright infringement issues. YouTube doesn’t appear to get involved much in the process either, leaving the labels to decide what goes and what does not. Another company that headed down that route recently was SoundCloud. The audio upload site has been coming on in leaps and bounds over the past five years, in part due to the popular and sometimes illegal content uploaded by its users. Recently, however, it was revealed that not only had the company given Universal Music the ability to take down infringing content, but to do so without oversight. YouTube allows the labels to do that because it struck a distribution deal with them, but why would Soundcloud follow suit? News today suggests that this particular question answers itself. According to a Bloomberg, Universal Music, Sony Music Entertainment and Warner Music Group are “closing in†on a deal with Soundcloud which will see the service obtain licenses to host and distribute content from these major labels. An anonymous source familiar with the negotiations said that the deal will not only see the labels getting a share of future Soundcloud revenue, but Universal, Sony and Warner each picking up a 3% to 5% stake in the business. On top of that and most importantly, Berlin-based Soundcloud will receive assurances that it won’t get sued, a valuable stability that US-rival Grooveshark is unlikely to enjoy anytime soon. No one involved in the talks is speaking on the record, but sources suggest that the agreement would value Soundcloud between $500 million and $600 million, not bad for company that was nibbling at the heels of MySpace just five years ago. The 200 employee company is definitely on the up. One year ago Soundcloud reported having 200 million unique users, but by November 2013 that had increased to 250 million. A target of one billion users leaves Soundcloud with plenty to do, but with the threat of large-scale litigation off the table, the process will be much, much easier.
  11. Responding to a consultation of the EU Commission, various music industry groups are warning against a right for consumers to sell their MP3s. IFPI notes that people should be barred from selling their digital purchases because it's too convenient, while the quality of digital copies remains top-notch. Interestingly, the UK Government opposes this stance with a rather progressive view. To gather the opinions of the public and other stakeholders on copyright reform, the EU Commission launched a consultation a few months ago. The call resulted in hundreds of submissions, which were made public recently. One of the topics being covered is the issue of “digital resales.†In other words, whether consumers should be allowed to sell digital music files, videos and software they purchased previously. In the United States the ReDigi case has been the center of this debate, with a federal court ruling in favor of Capitol Records last year. In the EU, however, the Court of Justice previously ruled that consumers are free to resell games and software, even when there’s no physical copy. In the submissions to the EU Commission consultation numerous parties weigh in on the subject. Interestingly, the UK Government takes a rather progressive stance by stating that people should be allowed to sell “used†tracks bought in the iTunes store, or used videos they’ve downloaded from Amazon. “As regards the resale of copies, the UK notes that traditional secondary markets for goods can encourage both initial purchase and adoption of technologies, and the prospect of sale on the secondary market may be factored in to an initial decision to buy and to market prices,†the UK response reads “There seems to be no reason why this should not be the case for digital copies, except for the ‘forward and delete’ issue noted by the consultation,†it adds. In other words, according to the UK Government people have the right to sell any digital files they have bought, as long as the original copy is deleted. This stands in sharp contrast to the various record label groups who warn that digital resales may crush the industry. IFPI, for example, notes in its submission that allowing digital resales would hurt the entire music industry, and threaten the livelihoods of many artists. “In the recorded music sector, the consequences of enabling the resale of digital content would have very harmful consequences for the entire music market,†IFPI writes. “The notion that the exhaustion principle should apply to copies acquired by means of digital transmissions in the same way that it applies to physical copies ignores the many differences between the two kinds of copies and between the two distribution processes,†the music group adds. IFPI signals three main differences between digital and physical distribution that warrant a ban on digital resales. According to them, physical music is different because: the quality of these deteriorates with time, and often due to wear and tear or mishandling purchasing an item at a used record store requires traveling to the store and searching for a copy of the phonograph record the resale only concerns the original recording, not copies of that recording In other words, people shouldn’t be allowed to resell digital music because it’s too convenient, and because the copies don’t lose their quality. While it’s no surprise that the labels are against digital resales, these arguments do raise some eyebrows. After all, there are also many physical products that are easy to ship and keep their value over time, which are perfectly fine to resell. IFPI is not alone in their restrictive view on selling used digital files. The UK-based music group BPI also submitted a response to the consultation, using similar arguments, as did individual labels such as Universal Music and Sony Music. “The consequences of allowing resale of previously purchased digital content would be devastating to the music industry. It would compete directly with the sale of original digital files as they would be entirely substitutional,†Universal notes, for example. It is now up to the EU Commission to sift through all the submissions to see what the ideas of various stakeholders and the public are on the matter, and how this should impact future legislation.