The Megaupload case starts to smell

Posted by on January 24, 2012

The whole Megaupload case is starting to look odd.

Here is what happened in chronological order:

First, in December, a viral music video appears, a commercial by Megaupload featuring a couple of high profile US artists supporting. The video was later removed from YouTube due to complaints by Universal Music – which didn’t own the rights to the clip. That led Megaupload to sue Universal

Right before Christmas, Megaupload launched MegaBox, a music streaming service. According to the reports, the plan was to allow artists to sell their songs and to keep 90 percent of the earnings. I tried MegaBox without getting too impressed – I expected free full length songs but only found 30 second previews. And in order to upload your own music collection to the service, one had to download a special client, which I didn’t trust (it’s still Megaupload we are speaking about). Nevertheless, the thought of Megaupload and artists working together, removing the labels from the equation, sounds revolutionary. 

A couple of weeks later, it was reported that multi-million selling hip-hop producers Swizz Beats was the CEO of Megaupload. Later, after the raid, it was said that he actually hadn’t signed a contract yet.

A day later, Megaupload was shutdown by federal prosecutors, the people behind the site (including Kim Schmitz) were arrested in New Zealand.

Then, yesterday, tweets by hiphop celebrity Busta Rhymes emphasized how Megaupload proved to be a working business model for artists who got paid by the site if their free songs got downloaded a lot – cutting out the middle man aka the labels.

Putting all those pieces together makes it look as if the Megaupload people were about to seriously attack the music industry – with the help and support of some very popular artists. 

Before this could happen, the FBI stopped it.

Despite the fact that Kim Schmitz and the other Megaupload crew members definitely aren’t the most trustworthy people, and despite the fact that there hardly was any copyright protected media content that wasn’t available through Megaupload, this case seems to be more complex than what it initially looked like.


This article has 3 comments

  1. jke Reply

    I agree. I also wonder why the FBI had access to e-mails ex 2006. But then again, maybe not that surprising.

  2. Tony Warriner Reply

    Interesting review on thing, i haven’t followed the situation closely so thanks for the information.As far as the record label issue goes, i was actually curious how iTunes effectively works for artists. Do they give part of their profits obtained via iTunes to the labels or do they keep the entire profit? iTunes always seemed to me like it was making a step into taking the labels out of the equation, though i’m not sure how equitable or fair they were trying to be in the process.I know there are SOME means of excluding the labels out of the equation, i remember Trent Reznor recommending the people who were distributing his music on Nine Inch Nail’s site and saying that they were fair and straightforward, i’m pretty sure Reznor has his own record house/studio at this point though.

  3. Black Dragon Reply

    Megaupload deleted 50 million pirated link biggest by any file hosting company and give direct access to many company to delete pirated stuff

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