Record Labels Continue To Go After Music Startups

Legal Issues

from the onwards-and-downwards dept

On Friday, we wrote about how the likelihood of eventual lawsuits created a chilling effect that shut down Mixwit, a useful online mixtape service provider. It seemed quite unlikely that Mixwit was violating copyrights, as it didn’t host any music nor make the music that people played through available for download. However, that won’t stop the record labels who seem to believe that any service that lets you play music must first receive the big record labels’ blessing (and, in case you were wondering, that blessing costs a lot of money, and often equity).

Earlier this year they sued one such startup, called Project Playlist. Similar to Mixwit, Project Playlist doesn’t host any music. It just sends a search query to a variety of search engines, finds results of publicly available music via those search engines and then aggregates the results into a playlist. It then allows you to create widgets with that playlist. All of this should be perfectly legal. Project Playlist simply has no way of knowing whether the music found via various search engines is legal or not. It’s not doing any of the hosting. It’s not allowing downloading for infringement purposes. It’s difficult to see what possible complaint the record labels have with it, other than the simple fact that it’s a good innovation that people like, and no one’s paying the big record labels for it.

Of course, lawsuits take some time, and apparently (unlike some other startups) Project Playlist hasn’t simply folded when the lawsuits showed up. The company, which has raised a significant amount of money and has brought on experienced internet execs seems to be fighting back. So what did the record labels do? Well, they went after third parties, such as MySpace and Facebook who host the widget from Project Playlist. This is even more untenable than the lawsuit against Project Playlist. MySpace and Facebook are even further away from any liability, because as open application platforms, they don’t even know much of what their applications do, let alone that one may be going to search engines, finding publicly available songs, putting them into a playlist and letting people stream them.

But, why should anything like that stop the record labels? So, late last week, MySpace gave in and locked out Project Playlist widgets while Facebook seems willing to push back on behalf of users. MySpace’s move really isn’t that surprising, since MySpace launched its MySpace Music offering to terrible reviews and (from the buzz we’ve heard from insiders) much less use than projected. MySpace Music competes directly with Project Playlist, so the company must be thrilled about an excuse to shut down access to Project Playlist, even though the end result might just drive users away, and make app developers that much more cautious about betting on MySpace as a platform.

Apparently, record label folks are claiming that Facebook’s refusal to block Project Playlist is “irresponsible,” which is laughable coming from the recording industry — perhaps the most irresponsible and short-sighted industry around. Facebook knows that it has the law on its side, and at best the recording industry can launch a wasteful, money-sucking lawsuit against it, which will only drive music fans further away from the recording industry. If the record labels want to talk “irresponsible” they should look at themselves in the mirror first.

Update: Interesting timing here. Apparently Sony BMG has worked out a deal with Project Playlist. While News.com designates this as “good news,” I’m not so sure. Yes, it’s probably good news from the standpoint of avoiding a lawsuit, but it’s bad news from the standpoint that Project Playlist was pressured into signing a deal that legally it almost certainly does not need. It’s now set a precedent that rather than stand up for its rights, if you threaten enough, the company will fork over money (and potentially equity). Once again, this just reinforces the record labels’ incorrect position that no one should be allowed to innovate in the music space without paying a toll to the big record labels.

Filed Under: copyright, playlists, takedown, widget
Companies: facebook, myspace, project playlist, riaa