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October 22, 2008 4:00 AM PDT

Will record labels control digital-music lockers?

by Greg Sandoval
  • 20 comments

A fitting anthem for Michael Robertson these days would be The Rolling Stones' hit, Get Off of My Cloud.

For nearly a decade, Robertson, the often controversial cofounder of MP3.com and Linspire, has toiled to store music in the cloud, the term used to describe the seemingly limitless amount of data and services accessible with a Web browser. But in the past, Robertson's efforts have led him into epic legal battles with the music industry. That's where he finds himself once again. In November, EMI filed a copyright suit against him and his music service, MP3tunes.com.

Michael Robertson says corporations can't dictate what music buyers do with their legally purchased songs.

(Credit: Michael Robertson)

More recently, Robertson has had to watch competitors generate headlines with an idea he helped pioneer. On Monday, Lala.com launched a service that enables customers to upload songs into digital music lockers (or the cloud) and then stream the tracks to Web-connected devices. Before launching, Lala obtained licenses from each of the top four recording companies. The differences between MP3tunes and Lala are many but chief among them is this: Robertson doesn't believe services such as his are obligated to obtain licenses to help consumers store legally owned music.

There's potentially a lot at stake here--that is if you believe all our gadgets will one day connect to the Web, and that people will access music from celestial jukeboxes via whatever device is handiest. How Robertson's legal case is decided could help determine who owns the keys to digital lockers.

EMI says issue is piracy
Little in EMI's complaint indicates that the label objects to the storing of music in lockers, digital or otherwise. As a matter of fact, the document reads like a run-of-the-mill piracy complaint.

EMI, the smallest of the top labels, alleges that Robertson has set up his two operations, MP3tunes.com and Sideload.com, to deliver a one-two punch against copyright. According to EMI's complaint, Sideload finds and organizes links to pilfered music files on the Web. MP3tunes then enables those pirated files to be stored, copied, and downloaded to devices without paying a dime to the music creators.

"Next to each Sideload song is a small "SL" icon," EMI wrote in its complaint filed in U.S. District Court in New York. "When users click that SL icon, MP3tunes makes a full permanent copy of the desired work and stores it in a locker assigned to that user at MP3tunes.com."

"If EMI is right, their argument indicts every single online storage service and ISP in the world."
--Michael Robertson, MP3tunes founder

The record label accuses MP3tunes of then handing users the ability to share access to their music lockers with anybody. According to EMI, MP3tunes only requires customers to submit an e-mail and password to access their music. EMI lawyers argued that such lax security enables a locker to become a "virtual drop box for this illegal distribution."

Robertson dismisses EMI's claims and said Sideload is nothing but a search engine just like Google and Yahoo. The Digital Millennium Copyright Act protects service providers from responsibility for any crimes committed by users, Robertson said. He claims EMI's lawsuit is designed to camouflage the record industry's true goal, which is to prevent him and anyone else from storing music in digital lockers without first paying licensing fees.

"This is about what users are allowed to do with their music," Robertson said. "Are they allowed to put it on their phone and their game devices or on multiple PCs without paying the labels each time? I say they are. Consumers don't want a corporation deciding for them what they can do with their property."

To help prove that MP3tunes violates copyright law, EMI is focusing its legal attack on the way MP3tunes stores music, Robertson said. Before I get to that, there are some things about Robertson readers should know.

Is MP3tunes different than MP3.com?
First, this is certainly not his first court fight. He was one of the cofounders of MP3.com, which attracted a huge following in the late 1990s partly by doing what MP3tunes.com does now. MP3.com's Beam-It program enabled users to load CDs into online lockers and access the songs from Web-enabled devices. The problem was 10 years ago many people were still limited by 56k connections.

It just wasn't feasible to upload music this way, Robertson said. In order to speed up the process, MP3.com purchased $1 million worth of CDs and created software to scan a user's hard drive. The software detected whether a user owned copies of songs found in MP3.com's library. If they did, the service gave the user access to its copies.

The labels zeroed in on this. Universal Music Group alleged in a copyright suit that MP3.com was unauthorized to use its songs as a data base. In a landmark decision, the judge agreed and MP3.com eventually paid UMG more than $53 million. Then the company, which had raised $370 million in a 1999 public offering, merged with Vivendi. Later, its domain name was sold to CNET, publisher of News.com.

"The court found that MP3.com had engaged in willful acts of copyright infringement," EMI wrote in its latest lawsuit, adding that Robertson ultimately started MP3tunes.com as a "vehicle to achieve a comparable infringing purpose."

Again, Robertson shrugs off EMI's charges. He said his company is clean. Technology has improved and he doesn't have to create a central music library. Users can create one for him by uploading their own songs. But wait. Is it legal to manage a central music library without permission from the copyright owners regardless of who stocked the library with songs?

Unauthorized performances
Let's step back for a second. It's incorrect to think of digital music lockers in the same way one thinks of a high school locker, says Robertson. Music uploaded into the site isn't tucked neatly into some walled-off area. Songs from every customer are loaded onto the same hard drive, he said. But it's important to note much of of the music is never actually stored, Robertson acknowledged. It would be inefficient and expensive to store numerous copies of, say, The Beatles' classic "Yesterday" or AC/DC's "Back in Black."

MP3tunes keeps a copy of a particular song and distributes that one to customers over and over again. This means, however, that the files users load onto the site are unlikely to be the same ones they hear when accessing their music. Every company handling digital information operates the exact same way, Robertson argues. Nonetheless, EMI claims that MP3tunes is not authorized to distribute music this way and is violating copyright law.

"If EMI is right, their argument indicts every single online storage service and ISP in the world," Robertson said. "We didn't invent this technology. That's a default feature in every single storage system."

Robertson has a point. How much sense does it make to store 10,000 copies of the 10,000 most popular songs? If the copies are exact, what's the difference whether I'm listening to my bits or someone else's as long as I legally purchased the music? Don't I own the right to hear the song?

EMI's attorneys will almost certainly argue that a user purchases a set of bits and they only own the right to those bits.

The label is also likely to compare MP3tunes to MP3.com and claim that in both cases Robertson operates a music data base without permission from the copyright owners. The only difference is that MP3tunes didn't actually make any of the copies on the site.

It will be interesting to see whether that's enough of a distinction to satisfy the courts, especially when Robertson has acknowledged customers of MP3tunes, like those of MP3.com, aren't listening to their own music files.

October 20, 2008 9:44 PM PDT

New Lala.com may be (too) ahead of its time

by Greg Sandoval
  • 25 comments

Lala is betting big that consumers will one day pay to store songs in digital music lockers.

(Credit: Lala.com)

Lala.com is finished helping users swap CDs and no longer is it interested in just being a Web radio station.

Stick with me here because Lala.com's new business model, as well as its history, is kind of convoluted and that's part of the problem.

The music service--on its third incarnation--is offering a way for consumers to store songs in digital storage lockers and access them from any Web-enabled device. For those of you who have been around a while, this may sound a lot like MP3.com or even MP3tunes.com, companies started by Michael Robertson, the serial tech entrepreneur. (MP3.com is now owned by CNET News publisher CBS Interactive.)

Robertson wanted users to upload copies of their own music into digital lockers. In contrast, Lala has licensed music from the four largest recording companies and a host of indie labels. Once a user downloads the company's software, it will scan the user's hard drive and maintain a copy of their music libraries in the so-called cloud. The beauty of this is it will even make copies of music protected by copy-protection software. The library can then be streamed to any Web-enabled device. Cool, right?

But there's one big obstacle. I still can't access the Web from everywhere. I take San Francisco's Muni train. What happens when I'm underground and don't have Internet access? That means dead air. And above ground, there are still plenty of places that lack Wi-Fi or network coverage.

"You've got to face it, there's nothing you don't do in a browser."
--Bill Nguyen, Lala.com cofounder

Internet access will only continue to grow, but it's got a long way to go before it rivals my iPod or any other digital music player. I download a song to my iPhone and it's guaranteed to play regardless of my location. Bill Nguyen, Lala's charismatic cofounder, disagrees. He sees a world dominated by the browser.

"Will you ever (in the future) use an electronic device if it's not connected or doesn't have a browser?" Nguyen asked. "Think iPhone/iTouch/iPod for a moment. They went from $200 for 60GB to $300 for 16GB. What did you get for the 50 percent increase in price and 73 percent drop in storage? We got a wireless connection and a browser.

"PC's are going the same way," Nguyen continued, "with the hottest category being Netbooks that forego fancy hardware and big screens for an affordable price, light weight and a Wifi connection. You've got to face it, there's nothing you don't do in a browser."

The novel way Lala plans to make money is by requiring people to pay for unlimited access to their songs. If a user wishes to listen to an entire song free of charge, he or she can but only once. To have unlimited access to the music in their lockers, users must pay 10 cents a song (Note: the 10-cent charge only applies for streaming music or "Web songs" purchased from Lala). Great price, but it comes with some serious strings. Remember, you can't download these songs. They have to be streamed.

For those people who want to own their music outright, Lala will be happy to sell tracks free of any copy protection software. But so do a lot of other stores, including Amazon.com, Rhapsody, and Walmart.com.

My point is that there are very few problems that this version of Lala solves in a unique way--plenty of companies, including MySpace and iMeem already offer streaming music. (I won't even get into how difficult it likely will be to explain all of this to consumers.)

The biggest selling point Lala offers is that users can claim their music from a range of devices and that means they are not locked into one gadget or any DRM scheme. Where Lala fails--at least for now--is that it can't deliver music where Wi-Fi or network coverage is spotty.

Lala has to hope technology catches up to its business model.

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