The blogosphere is enraged at the shut-down of a popular site called Muxtape. I am not one to defend the overly litigious nature of the fading music industry (will the lawyers be the only employees be left standing at the four majors?), but this site was unlicensed and was offering interactive (i.e., on demand) streaming of copyrighted sound recordings. You need a license to do that. It’s not even a gray area of the law.
Muxtape took the common path of choosing to infringe rather than get licensed (i.e., the YouTube strategy). This is a legitimate strategy these days. The alternative involves the raising of at least $5M of venture capital and then forking that over to the majors for licenses at terms which do not allow a sustainable business to be built (i.e., the iMeem strategy). The YouTube strategy involves a bunch of praying. You pray that you can use viral marketing to get big enough and sell to a deep-pocketed acquirer who will defend the company in lawsuits and simultaneously use their leverage to get better economics in the licensing deals. Muxtape’s prayers were not answered, it seems, and the RIAA got to them before an acquirer stepped in.
Of course both of these paths are ultimately fruitless if the goal is to once again grow the music industry. The only way that happens is if the majors start viewing entrepreneurs as partners. Isn’t it better to license 1000 new startups with non-predatory terms and see who can build something consumers get excited about?
Thanks for a blog post about muxtape which actually understands the situation. While I’m sure that muxtape was under pressure from the RIAA this hadn’t taken the form of any solid legal attempt to shutter the site. I’m pretty sure they just ran out of money and can’t get more because
1) Legal problems
2) Not particularly popular (~100,000 visitors)
3) Zero user growth after the launch in March
4) No viable revenue generating strategy
All these are of course relative to imeem which permits users to do everything that muxtape does. imeem dealt with the legal problems with large cash reserves. imeem has about 100 times the users of muxtape. They’ve kept growing. And their site is covered with ads and special promotion deals.
muxtape would have to become like imeem which means spending lots of money, and changing too many core things about the site, alienating their blog-centric fanbase.
I suspect that muxtape will return in muxh transformed fashion, possibly in partnership with another site.