Digital Media

15-year-old David Nelson co-founded Muziic, a new music service, with his father. Whether the site is legal remains unclear.

(Credit: Mark Nelson)

David Nelson, the 15-year-old co-founder of the free site Muziic, idealizes Napster creator Shawn Fanning. But that doesn't mean he's going to run his business the same way.

Muziic, which launched two weeks ago, is a music service that piggybacks on YouTube. Nelson's software rounds up YouTube's music videos and enables users to sort and add them to playlists as if they were MP3s. There's no messing around with YouTube's search engine, videos, or advertisements.

There's little about Muziic that compares to Napster, the peer-to-peer service that helped demolish the traditional music business and usher in a new digital era. Yet, Napster in its original trailblazing form didn't last long. The site, some would argue, doomed itself by defying copyright law. For Muziic, Nelson has more modest goals and higher hopes.

Nelson, who lives with his parents in Bettendorf, Iowa, about 60 miles east of Iowa City, said: "We knew when we started out that the key was to develop something legal."

But the question of the site's legality is still unanswered. Mark Nelson, David's father and Muziic's co-founder, acknowledged this week that Muziic was built without the consent of YouTube or any of the major recording companies. What's unclear is whether Muziic complies with the terms of service for YouTube's API or whether the big record companies will object on the basis of copyright.

Last weekend, a YouTube spokesman said that after a preliminary review of the site, Muziic appears to violate its terms of service. The spokesman didn't specify how. On Thursday, Mark Nelson, 45, said he and David were contacted by YouTube and talks between the companies have begun.

Later in the day, a YouTube spokesman issued a statement about Muziic that at best was noncommittal: "We encourage people to leverage the power of our open API to embed YouTube videos in creative and innovative ways that comply with our terms of service."

Representatives from the three largest labels still doing business on YouTube, Universal Music Group, Sony Music Entertainment, and the EMI Group, either declined to comment or did not respond to interview requests.

What is clear is that a teenager--armed only with a good idea and precocious coding skills--has plopped himself into a rapidly shifting and legally shaky digital music climate. The record companies, perennially struggling with the digital world, may just now be developing serious doubts about sites like Muziic.

During the past two years, the big labels partnered with ad-supported streaming services such as Imeem, MySpace Music, and Last.fm (owned by CBS, parent company of CNET News). They hoped the sites would one day generate big advertising bucks and spur download sales, according to record industry sources. Recent studies show, however, that free streaming may compete with sales, the sources said.

'Can you do that?'
"We don't have anything against sharing with the music industry," said Mark Nelson when asked whether he worries about lawsuits or paying licensing fees.

If some in the music sector think the elder Nelson sounds arrogant, on the phone he sounds more naive than confident. One must remember there's no public relations rep coaching the Nelsons during interviews. There are no MBAs, no lawyers, not a dime of venture capital money.

There's nothing but father and son.

Nearly a year ago, Mark and David were watching "Star Trek" in their living room when Mark suddenly asked: "Wouldn't it be great if we could use YouTube's API to build a music site?"

David got excited. "It needs to be a desktop app," he told his father. "It's got to be something that anybody can open up in Windows. Imagine if you took YouTube and could play the videos in a media player."

"Can you do that?" Mark asked.

David paused to consider what it would take. "Yes," he said.

He was 14 at the time.

David taught himself how to write code, he says. At age 8, he started messing around with HTML. He moved up to JavaScript, PHP, and finally Visual Basic. He said while other kids were outside playing, he was inside reading manuals on scripting languages. His father, who works nights operating machinery at U.S. aluminum giant, Alcoa, says he knows his way around a PC, but doesn't know how to write code. "David did all the coding," Mark says.

What does David do for fun? Like most teens, he hangs out with friends. But he also enjoys reading about two of his other heroes, Google co-founders Larry Page and Sergey Brin. "I'm into Google history," David said. "I like learning about business."

Besides helping his son generate ideas for the site, Mark Nelson's biggest contribution to Muziic is paying the bills. According to David, the entire Muziic project has cost the Nelson family less than $10,000.

Those costs are likely to rise, however. A story about the service published last Saturday by CNET blogger Matt Rosoff helped raise the site's profile. Muziic now sees a total of 70,000 visitors per day, says Mark. Before Rosoff's story, the site received about 4,000 daily visits. In the two weeks since the site's launch, Muziic's software app has been downloaded more than 500,000 times.

Managing this kind of growth isn't easy for a two-man operation (in David's case "man" is used loosely). On Wednesday, Muziic saw some performance issues as a result of making too many queries to YouTube's API servers, David said. YouTube limits the amount of traffic from developer sites.

David said he solved the problem by caching queries made by Muziic's users so information can be pulled from his site's servers instead of YouTube's. It's obvious by the way David explains the fix that he enjoys trouble-shooting tech problems.

Other challenges may prove less fun.

Navigating the music sector
When Fanning unleashed Napster in 1999, the record companies were still very much in the dark about digital music, file sharing, and the power of the Web to transmit songs.

In some ways, it was easier then to launch a disruptive music service than for today's start-ups. Music executives have a greater understanding of technology. They also can be more wary. They still cut plenty of deals with digital services, but negotiations can be complex. The costs of obtaining licenses from a major label can run into the millions. For companies that don't negotiate, litigation can be just as expensive.

In Muziic's case, the Nelsons also have to worry about television networks and film studios. On YouTube there are a lot of music performances recorded from television or film. Do YouTube's licenses cover sites like Muziic?

Mark and David may have had some of these questions answered prior to launch had they spoken with YouTube. They said one reason they didn't was to avoid exposing their work to other developers. The other reason was David and his father didn't want to risk getting shutting down, David said.

That could rankle some label executives. One of their major complaints about digital music services over the past several years is that many launched first, built followings--enticing visitors with free music--and then told the labels "we're here, so there's nothing to do but negotiate a licensing deal with us."

Often the labels do just that. But music execs say using their libraries to draw an audience and then later ask for rights can undermine potential partnerships. They also emphasized that a site with a big following isn't guaranteed a deal. Just ask Project Playlist, a service that launched first, got sued by the recording industry, and as a result has been bounced off the top social networks.

The Nelsons say that they want to deal in good faith with the labels and they suspect the record companies will welcome them. "We think we solve a lot of the problems confronting digital music," Mark said.

One thing the Nelsons say they don't worry about is YouTube.

"We're not scared of Google," said David. "Those guys know a good idea when they see one, and I think they're going to recognize our service is a great way to listen to music."

A 15-year-old has created a free-music service by harnessing YouTube's vast library of music videos.

David Nelson, 15, swapped public school for online classes to devote more time to Muziic.

(Credit: Mark Nelson)

Muziic, created by teen developer David Nelson, has built an iTunes-like interface on top of YouTube. The service enables users to stream YouTube's music to their PCs without fiddling with videos. Users can build playlists and organize songs in a way similar to iTunes.

CNET blogger Matt Rosoff first wrote about the service and gave it a favorable review. "Any song that's been uploaded to YouTube is available in Muziic," Rosoff wrote. "This includes music unavailable on most commercial services, like the full Pink Floyd performance at Live 8 and Led Zeppelin's one-off performance in 2007."

I downloaded Muziic and this is a slick piece of software. Streamlining YouTube's music experience is an idea that I suspect a lot of people have considered, and one that Universal Music Group appears to be pursing. Last week, CNET reported that the largest of the top four recording companies, is negotiating to create a premium music-video site in partnership with YouTube.

So, the Nelsons are to be congratulated for coming up with a great idea and developing a very cool service.

But here comes the cold water: this site has yet to receive the blessing of Google, the large recording companies or the scores of film and TV rights holders who filmed the many live performances on YouTube. I doubt these companies will welcome a service that makes it easy for users to avoid YouTube ads. They certainly won't allow the Nelsons to profit without at least receiving compensation.

"This is the first we've become aware of the site," a YouTube spokesman told CNET on Saturday night. "We're looking into it now. On a preliminary review, however, it appears that the site violates our API terms of use."

Representatives from Universal and Sony were not immediately available Sunday to comment, and EMI declined to comment. Warner Music's library was removed from YouTube after the two sides failed to renegotiate a new licensing deal.

I spoke with Mark Nelson, David's father, on Sunday morning. He said that they tried to contact YouTube when the site launched on February 25, but YouTube executives never responded. Mark also said he hasn't spoken to the big music companies or other rights holders.

Mark, a machine worker for Alcoa, said he and David worked hard to ensure that the site complied with YouTube's API. For example, YouTube requires videos play in any new app. So, the Nelsons inserted a tiny player in the interface. Will that satisfy YouTube? We'll have to wait and see.

I hope for Mark and David's sake there's a happy ending to their story.

Other companies, a number too long to list here, have developed nifty music services only to see them fail when they couldn't come to an agreement with the labels. The most famous was also developed by a teenager. If you listen to some in the music business, that site almost destroyed the industry.

The developer was Shawn Fanning and the site was Napster.

The good news is that the labels are much more willing than in the past to work with technologists. Often the solution is that the big recording companies will take an ownership stake in the start-up, like they did with MySpace Music.

"We have an open door policy to the labels," Mark Nelson said. "We would love to talk to the labels. We've worked long and hard on this. We would hate to see YouTube or the labels shut us down."

Note: The video clip above, James Brown playing the Letterman show in 1982, is an example of hard-to-find performances that YouTube--and now Muziic--have in abundance.