Thursday, October 19, 2006

Russian Download Site– Great Deal or Pirated Music?

Russian Web site All of MP3 has been pleasing customers but irritating the recording industry by selling low-priced MP3 music downloads. The site charges as much for an entire album as other sites charge for a single song, and also lets users download music in a variety of formats and quality levels, but it has been accused of violating copyright laws.

Mediaservices, the Moscow firm that owns All of MP3, recently held an online news conference with reporters to counteract the criticism and to insist that it is running a legal business, not a pirated music site. All of MP3 addresses the issue head-on at its Web site, insisting that its business is authorized by the Russian Multimedia and Internet Society (ROMS) and by the Russian copyright agency.

The company also claims to pay 15% of each sale to ROMS for royalties, which it says is responsible for paying the copyright owners. Mediaservices says that it has offered to pay royalties to the record companies but has been rebuffed. But Mediaservices has never had a license from the major recording companies to sell their music to begin with, which experts have said is a requirement under U.S. law.

The major record companies have copyright infringement lawsuits pending in Britain against the operators of All of MP3.

All of MP3's Web site says that the license fees for all downloaded materials are paid in accordance with Russian copyright law, but notes that the buyer is solely repsonsible for the use and distribution of materials from the site. "This responsibility is dependent on the national legislation in each user's country of residence," the site notes. It continues, "The Administration of does not possess information on the laws of each particular country and is not responsible for the actions of foreign users."

So basically they're putting the onus of legality on the user. I know a number of people who have bought entire music libraries from the site; at pennies per track, it's very affordable to do so. Will the recording industry go after people who buy music from All of MP3?

Not likely; the site is still a relatively little-known player in the music download market. Sounds like the record companies will instead institute more lawsuits like the one in England, seeking to shut down All of MP3's operators in individual countries. For now the company seems to be operating in a legal gray area. We'll need to stay tuned to see what happens next.

Tuesday, October 10, 2006

Google buys YouTube for $1.65 billion

The speculation is over: Google announced October 9th that it has bought video sharing Web site YouTube for more than one and a half billion dollars in stock. According to Google's official announcement, YouTube will operate independently, its offices will stay at their current location in San Bruno, California, and all 67 YouTube employees will remain.

Acquisitions are nothing new in the fast-growing, quickly consolidating Internet business. And Google has purchased a number of companies in its efforts to move from search engine to software and service provider, content supplier, and advertising giant.

But the YouTube purchase is breathtaking in a number of ways:
* It is supposedly the first Internet start-up company to be bought for more than $1 billion
* YouTube has only about four dozen employees total, as noted above
* Although YouTube provides more than 100 million video views a day, the company has only been in existence for a little over a year and a half.

In the past YouTube has been criticized (and threatened with legal action) for posting copyrighted videos without permission. But both Google and YouTube have in recent days signed deals with major music and TV companies to license content. CBS is said to be creating its own YouTube channel for TV shows like Survivor.

Hmmm, $1.65 billion for 67 employees... I'd say YouTube's small staff of hardworking employees is about to get a nice bonus!