Once the world’s largest recording labels and movie studios see this happening, things can go bad quickly, unless certain preventative steps are taken. Bringing the business into line with the DMCA is a necessary first step, one which will see the hosting site respond to takedown notices in a timely fashion.

Other sites have gone a step further. As underlined by the MegaSong debacle, YouTube gives some big record labels the right to take down content they don’t like, even if there are no apparent copyright infringement issues. YouTube doesn’t appear to get involved much in the process either, leaving the labels to decide what goes and what does not.

Another company that headed down that route recently was SoundCloud. The audio upload site has been coming on in leaps and bounds over the past five years, in part due to the popular and sometimes illegal content uploaded by its users. Recently, however, it was revealed that not only had the company given Universal Music the ability to take down infringing content, but to do so without oversight.

YouTube allows the labels to do that because it struck a distribution deal with them, but why would Soundcloud follow suit? News today suggests that this particular question answers itself.

According to a Bloomberg, Universal Music, Sony Music Entertainment and Warner Music Group are “closing in” on a deal with Soundcloud which will see the service obtain licenses to host and distribute content from these major labels.

An anonymous source familiar with the negotiations said that the deal will not only see the labels getting a share of future Soundcloud revenue, but Universal, Sony and Warner each picking up a 3% to 5% stake in the business.

On top of that and most importantly, Berlin-based Soundcloud will receive assurances that it won’t get sued, a valuable stability that US-rival Grooveshark is unlikely to enjoy anytime soon.

No one involved in the talks is speaking on the record, but sources suggest that the agreement would value Soundcloud between $500 million and $600 million, not bad for company that was nibbling at the heels of MySpace just five years ago.

The 200 employee company is definitely on the up. One year ago Soundcloud reported having 200 million unique users, but by November 2013 that had increased to 250 million.

A target of one billion users leaves Soundcloud with plenty to do, but with the threat of large-scale litigation off the table, the process will be much, much easier.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

At the time of writing the video on YouTube has 1,627,652,006 views and artist Psy has 5,451,160 subscribers to his channel. To call it an Internet sensation might be somewhat of an understatement and it seems almost everyone on the Internet has become involved either by watching, singing or dancing along to the track.

As one types ‘Gangnam Style’ into YouTube the site’s autocomplete suggests possible searches and at number six comes ‘Gangnam Style Parody’. Generally tolerated (at least from a copyright perspective), there have been countless reenactments of Psy’s track uploaded to YouTube from every corner of the globe, but one in particular has incurred the displeasure of music label Universal.

The video features four mayors from Denmark who parodied Gangnam Style in order to draw attention to the challenges faced by entrepreneurs in their region. But the singing and dancing from the unlikely quartet was accompanied by the original track, something which Universal believes they should be compensated for.

The argument appears to stem from the use of the track. While the mayors believe their contribution to the Psy phenomenon was entirely for parody purposes and therefore fair use, Universal sees things very differently. They insist that the mayors were actually attempting to increase their own profiles and used the video – and Universals copyrights – in order to boost their political careers.

“It is clear that we have in mind that there are local elections in a minute,” said Universal’s Dennis Ploug in a statement.

As a result, Universal say that the mayors will have to pay a bill of almost $42,000 ($10,500 each) to obtain a license to use the music in the video – and they have just 24 hours to stump up the cash.

“We have given them a payment deadline of Friday, but if they do not pay before then it becomes a real action for infringement, and so the amount will be completely different,” Ploug concludes.

A representative from one of the four municipalities issued with a bill from Universal says that any liability lies with the outfit commissioned to produce the video.

Susanne Linnet Aagaard, from production company Future Factory, says that the amount demanded is simply too high.

“The legal expert we have consulted believes [the demand] is many times higher than what you would pay to use the music in a feature film,” Aagaard says.

“[Universal] want money for four violations, but only one has been committed. They have just seen their chance to win big, and multiply the bill by four.”

The video is now back up on YouTube with Psy’s music removed. Subtitles and random applause have been added to bizarre effect. It’s fair to say that if the video ever had any charm, it’s now been completely destroyed. Add on a $42,000 bill and the disaster is complete.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

The basis for the takedown has never been clear. While YouTube clearly indicated that UMG had taken the Mega Song down on copyright grounds, Universal later added that it had a deal with YouTube to take down content even if it doesn’t infringe their rights. This, the company says, allows it to sidestep any claims Megaupload makes against it under the DMCA.

Notably, though, Universal has never said exactly why it had the video taken down. Soon, however, it may have to.

In a new Megaupload court filing made available to TorrentFreak today, the file-hosting service makes it clear that it will go to considerable lengths to find out exactly what has been going on at Universal, YouTube, Vimeo and other entities involved in the Mega Song takedown.

“In its opposition to the [Temporary Restraining Order], UMG did not even attempt to defend the legitimacy of its false claims to ownership of the Megaupload Video,” states the Megaupload filing. The cyberlocker adds that UMG made several assertions which now require clarification for the case to proceed correctly.

The first UMG claim is that Megaupload sued the wrong UMG ‘entity’. They say that UMG Recordings is the correct entity since they are the ones dealing with YouTube and other video hosting services.

Second, Megaupload wants to get to the bottom of UMG’s claim that the takedown request it filed with YouTube was not made under the DMCA, but as part of a private historical agreement the label has with YouTube.

The third UMG claim is that they had nothing to do with takedowns of the Mega Song carried out at other video hosting sites such as Vimeo.

Bemoaning the fact that none of UMG’s claims have been backed up by evidence or witnesses, Megaupload says it now needs facts to move forward.

“Megaupload therefore respectfully requests that the Court grant it leave to take limited but essential written discovery…regarding the UMG Entities’ private dealings with service providers regarding the takedowns of the Megaupload Video and the identity and authority of the persons or entities who requested the takedowns,” the company writes.

“Without such information, Megaupload will be unable to determine which UMG entity instructed YouTube to remove the Megaupload Video; which other, non-UMG persons may have so instructed YouTube; and on whose behalf, on what grounds, and under what authority the removal was sought.

“In addition, as UMG has denied sending notices itself to other service providers, subpoenas to any such providers who took down the video is the appropriate means to determine the party doing so,” the filing adds.

There can be little doubt that keeping the Megaupload name in the news is something that Universal should have anticipated when they took the Mega Song down. Right now, if the aim was to shut Megaupload up and dampen their campaign, they have failed. At the time of writing the standard and HD versions of the song have close to 13.7 million combined views on YouTube.

But perhaps even worse, Universal appear to have enabled an arch enemy to take the moral high-ground in their ‘rogue site’ propaganda war and that’s why this discovery process will be so interesting.

Do Universal have an ace up their sleeve, or was the Mega Song takedown simply a terribly ill-conceived, knee-jerk, and solely destructive action? We’ll all find out soon enough.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

In his or her comment the individual claimed to be a somewhat disgruntled Grooveshark employee, outlining claims of copyright infringement at the company which if true would destroy any safe harbor protection Grooveshark might have enjoyed.

The claims were picked up by Universal Music and referenced heavily in their recently filed lawsuit against Grooveshark, one which the company says it will fight.

Of course, everyone wants to know who the anonymous commenter is, if only to assess their credibility. Surprisingly, though, the first indication that there could soon be a subpoena to find out hasn’t come from plaintiffs Universal.

“While [Grooveshark parent] Escape [Media Group] certainly denies those allegations, and believes that Universal’s lawsuit has no merit, the anonymous comment in your publication, and related information, may be important to the lawsuit,” wrote Grooveshark’s legal counsel Marshall Custer in correspondence with Digital Music News this week.

“As a result, I must request that you preserve all electronic information and any other records related to that comment, as it can be reasonably anticipated that either Grooveshark or Universal may find it necessary to subpoena such information as the case progresses,” he concludes.

The big question now is what information Digital Music News keeps on its commenters. In order to stop spam and abuse many sites carry IP address information, and if these can be paired with a usable timestamp Grooveshark could then move to the next stage – sending a subpoena to the individual’s ISP in order to obtain their identity – or at least the identity of the person paying the bill.

To date only Grooveshark has indicated they would seek information from DMN.

“Oddly, Universal Music Group has never contacted us regarding this comment, either before or after the legal filing,” says DMN founder Paul Resnikoff.

One can only speculate on the reasons for Universal’s apparent lack of interest in obtaining the individual’s identity, but sometimes the fog of war needs to lift before a precise strategy and what people already know is truly revealed.

So until then the question remains: Is the currently anonymous commenter a genuine whistleblower or simply malicious? The legal difference may yet prove interesting.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

The conclusion drawn by Fripp was that getting unauthorized music taken down from Grooveshark is next to impossible, and that even when music is taken down, it simply reappears. Grooveshark SVP Paul Geller eventually acknowledged mistakes had been made, but also criticized Fripp’s attempts at “doctoring” details of discussions between the band and the company concerning the takedowns.

But on the same day, October 17th, a comment claiming to come from a Grooveshark employee appeared on DMN with alleged details of how the company operates.

“We are assigned a predetermined ammount [sic] of weekly uploads to the system and get a small extra bonus if we manage to go above that (not easy). The assignments are assumed as direct orders from the top to the bottom, we don’t just volunteer to ‘enhance’ the Grooveshark database,” the posting began.

“All search results are monitored and when something is tagged as ‘not available’, it get’s [sic] queued up to our lists for upload. You have to visualize the database in two general sections: ‘known’ stuff and ‘undiscovered/indie/underground’. The ‘known’ stuff is taken care internally by uploads. Only for the ‘undiscovered’ stuff are the users involved as explained in some posts above,” it added.

If the previous paragraphs weren’t enough, then came the killer.

“Practically speaking, there is not much need for users to upload a major label album since we already take care of this on a daily basis.”

According to a CNET report, UMG have taken a keen interest in the anonymous post, going as far as to cite it in a freshly-filed lawsuit that contains claims which if proven true, have the potential to destroy Grooveshark at a stroke.

“[The business records of Escape Media Group, Grooveshark's parent company] establish unequivocally that the sound recordings illegally copied by Escape’s executives and employees include thousands of well known sound recordings owned by UMG,” write Universal’s lawyers in the complaint filed in the U.S. District Court in Manhattan.

Of course, if Grooveshark’s employees have indeed been uploading music to the service, the company’s DMCA ‘safe harbor’ protection is dead in the water. But anonymous Internet postings aside, just how sure are UMG that Grooveshark staff really did upload infringing material? Apparently, very sure indeed.

Last year, Universal filed a complaint in New York County Court against Escape Media Group containing claims that Grooveshark was providing “free access to UMG’s pre-1972 recordings.” As part of that process Universal was forced to hand over a database containing details on music uploads to the Grooveshark system. Items in there clearly piqued the interest of UMG.

The new complaint filed yesterday states that Grooveshark CEO Samuel Tarantino personally uploaded at least 1,791 copyrighted songs to the Grooveshark system, Senior Vice President Paul Geller 3,453, and Vice President Benjamin Westermann-Clark more than 4,600 illicit tracks.

Although it is unclear how many of these are covered by UMG copyrights, in total the label says that more than 100,000 tracks were illegally uploaded by Grooveshark employees. At $150,000 per infringement, by anyone’s calculations that is a staggering amount of money.

This has been a bad week for Grooveshark. Earlier, anti-piracy group RettighedsAlliancen, who are better known by their former name Antipiratgruppen, revealed they had sent an urgent demand to the Danish “bailiff court” (known locally as Fogedretten) to have the country’s ISPs block the site.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

The Act was pushed through by Lord Mandelson, then Secretary of State (SoS) for Business, reportedly after visiting Dreamworks founder David Geffen at a villa in Corfu on 7 August 2009.

It turns out that Lord Mandelson’s protestations, that the meeting had nothing to do with his support for the initial Bill, were true.

Just released documents show that Mandelson had made his mind up before that, following meetings several weeks earlier with head of Universal Music, Lucian Grainge.

If that doesn’t sound so bad, keep in mind that at this point Mandelson’s department was conducting a public consultation on this very topic, with 2 months still to go.

Documents released from Lord Mandelson’s office this week under the Freedom of Information Act indicate that this was a waste of time, and that almost nothing any participant could have said would have made a difference.

Notes from the July 2nd 2009 meeting show Grainge stating that notices will not work, which users have been happy to verify, and that “industries are being decimated by illegal file sharing”, an odd position to take since the British Phonographic industry has noted singles sales growing by at least 30% annually for the 4 years prior to this, and album sales only slightly down on their pre-Napster figures.

They might be forgiven for this mistake, unless someone had actually pointed out the sales figures in a consultation response, which someone did, although not until the end of the consultation period, in late September, two months after the decisions had been made.

In fact, the timetable released shows that the day after meeting with Grainge, Mandelson looked to force regulator OFCOM to go straight to ‘technical measures’ (slowdowns and disconnections), followed a week later by advice that judging the effectiveness of notices wasn’t needed, based purely on the (false) claims of a music industry CEO.

16 June 2009
Final Digital Britain Report produced
02 July 2009
SoS meeting with Lucian Grainge of Universal. SoS asked for advice on options exploring whether Digital Britain proposals on peer to peer file sharing will go quickly enough and far enough.
03 July 2009
Advice to Lord Carter (copied to SoS and DCMS) on possibility of SoS having a power to direct Ofcom to go directly to introduction of technical measures.
07 July 2009
Advice (through Lord Carter) recommending that the “power to direct” process should be adopted as preferred route (rather than Ofcom decision)
09 July 2009
Letter received from Universal stating :
* Digital Britain’s two proposals: Ofcom’s letters to file-sharers and the ability for music companies to prosecute persistent offenders are not enough on their own.
* Government must start planning for step 3 now – a statutory obligation on ISPs to crack down on persistent file-sharers by cutting bandwidth and suspending and blacklisting their accounts. This is outlined in Digital Britain but not due to be implemented for years. It is essential that this power is included in the Digital Economy Bill”
10 July 2009
Advice (through Lord Carter) on removing reliance on “trigger” mechanism to judge the efficacy of initial obligations.
13 July 2009
E-mail sent to officials stating: The Secretary of State has seen the letter from Lucian Grainge and commented: “I think we should examine, including step 3 power in Bill. What is Stephen Carter’s view? Officials need to meet and discuss asap as Lucian suggests”.

Geoffrey Norris begins series of meetings with key stakeholders to canvass views.

Such flagrant disregard for public opinion is not all that uncommon, but to do so in the middle of a public consultation is a very questionable practice

One consultation respondent told TorrentFreak: “As someone who went to considerable effort to submit a rational and evidence-based response to the consultation on these issues, I am disappointed, although not surprised, to see that the outcome was predetermined.” The UK Pirate Party is a little more scathing.

“These documents show how outrageously complicit everyone from the entertainment industry, politicians and unions were in framing the Digital Economy Act,” PPUK Chair Loz Kaye told TorrentFreak.

“Its most controversial aspect – suspending people from the Internet – was already sorted out in July 2009. It appears that the consultation was just for show, and the lobbyists got all they asked for. There are now serious questions to be asked of successive governments’ relations to groups like Universal Music and the BPI.”

As for the Geffen issue, while it is unlikely that claims that the topic never came up are true, there can be no doubt that Mandelson was not ‘recruited’ then, but a month earlier. A fact he teased with in his denial, which emphasised that “… work on this was already well in hand before the SoS’s [Mandelson's] holiday.”

—

Many thanks to Philippe Bradley and the Open Rights Group for persevering and getting these documents made public.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Anticipating on the possibility that not all customers will be interested in the monthly subscription service, the deal between Virgin and Universal also includes an anti-piracy section. That is, Virgin have pledged to go after their customers who share files illegally on BitTorrent and other file-sharing networks.

How exactly Virgin will prevent or discourage illegal file-sharing is unclear but the ISP itself will not spy on the download behavior of its customers or intercept traffic. Instead, they plan to warn those who download copyrighted content, based on evidence provided by third party tracking companies. Those who receive multiple warnings will experience a suspension in their Internet connection, lasting from “a few minutes to a few hours.”

Interestingly, less than a year ago Virgin publicly said that it would never disconnect alleged file-sharers, after they mistakenly threatened some of their customers with such a measure. There is “absolutely no possibility” of being disconnected, the company said at the time. Clearly they’ve had a change of heart.

In addition to this temporary disconnection, repeat infringers might face speed bumps or humps, meaning that their Internet speed could be decreased significantly, a measure that probably wont be very effective as a deterrent. The music industry is nevertheless happy with the deal and hope that many ISPs will follow Virgin’s lead.

“This is the kind of partnership between a music company and an Internet service provider that is going to shape the future for the music business internationally,” IFPI chairman and chief executive John Kennedy told Reuters commenting on the new deal, adding “It also marks new ground in ISPs’ willingness to take steps to protect copyrighted content on their networks, and that sets a very encouraging example to the whole industry.”

Geoff Taylor, head of the BPI was equally delighted about the deal and told the BBC: “It is very encouraging to see an ISP and a record label working together as creative partners. At the same time, the fact that Virgin Media will apply a graduated response system to tackle persistent illegal downloaders demonstrates that graduated response is a proportionate and workable way forward.”

Tomorrow the UK government will release the final version of the Digital Britain report where it will come up with detailed solutions on how ISPs and the creative industries should deal with the ‘piracy problem.’

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Quantifying its ‘losses’ in court, the four labels claimed illegal downloading costs the Irish music industry 13.8 million Euros every year, and since Eircom has 40 per cent of the ISP market, it must be held responsible for causing the industry losses of between 4 and 5 million Euros. Further details about the case are available in our previous report.

The case, which was due to run for 4 weeks, was cut short this evening after just eight days. According to an RTE report it has ended after a fairly shocking and unexpected development. The ‘Big Four’, headed by the IFPI, have reached an “amicable” settlement with Eircom.

In an agreement believed to be a world first, EMI, Sony BMG, Universal and Warner will start tracking the IP addresses of alleged infringers and supply the details to the ISP. Eircom has agreed that it will ultimately disconnect infringers from the Internet.

Essentially, Eircom has agreed to implement a “3 Strikes” regime against its own customers. On the first allegation the customer will get a warning. On the second allegation they will be informed that if they do not stop their activities, disconnection will follow. On the third, it’s Internet blackout time.

The Chairman of EMI said he now expects other ISPs to follow suit – serious pressure will be brought down on them immediately.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

EMI offered a deadline – either the IFPI reduced the costs associated with membership by 31st March 2008 – or EMI would leave. Now, after a few months of negotiations, it seems some sort of deal has been struck enabling EMI to stay as a member.

An IFPI spokesman said the organisation had been able to a agree a “sensible, appropriate and reasonable reduction in our budget.”

It won’t be just EMI that gets reduced rates either. The other major members – Universal, Sony and Warner will all benefit, says Jean-Francois Cecillon, president of EMI International:

“We undertook to work with our colleagues in the other major labels and with (IFPI boss) John Kennedy on a cost saving plan for the IFPI. Together we have been able to find solutions which we believe are achievable whilst maintaining what the IFPI does best in representing our industry.”

Separately, the IFPI just announced it has successfully shutdown a Direct Connect hub in Chile, specializing in metal. If they feel that this type of action is the most effective way of spending EMI’s money, no surprise they wanted to leave.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

When EMI, Universal Music and Warner music reached settlement agreements with the likes of Napster, KaZaA and Bolt, they collected hundreds of millions of dollars in compensation – money that was supposed to go to artists whose rights had been allegedly infringed upon when the networks were operating with unlicensed music.

Now, according to an article, the managers of some major artists are getting very impatient, as it appears the very people who were supposed to be compensated – the artists – haven’t received anything from the massive settlements. They say the cash – estimated to be as much as $400m – hasn’t filtered through to their clients and understandably they’re getting very impatient.

Lawyer John Branca, who has represented the likes of The Rolling Stones and Korn, said: “Artist managers and lawyers have been wondering for months when their artists will see money from the copyright settlements and how it will be accounted for.”

Indicating the levels of impatience with the big labels holding the money he added: “Some of them are even talking about filing lawsuits if they don’t get paid soon.”

Of course, EMI, Universal and Warner have a different take on the delay, with sources suggesting that it’s down to the difficulties in deciding who gets what money, based on the levels of copyright infringement for each individual group or artist.

A recording industry on the back foot having spent most of its time fighting the digital revolution rather than becoming part of it, is clearly trying to hang on to every penny, even when it comes to compensating the artists who they claim they were defending by taking legal action in the first place.

Irving Azoff, who manages Christina Aguilera, The Eagles, Van Halen, REO Speedwagon and Seal (amongst others) says it’s hard for artists to get what they deserve from the labels: “They will play hide and seek, but eventually will be forced to pay something,” he said. “The record companies have even tried to credit unrecouped accounts. It’s never easy for an artist to get paid their fair share.”

Typically, the labels see it a different way. An EMI spokeperson said that it was “sharing proceeds from the Napster and Kazaa settlements with artists and writers whose work was infringed upon” while Warner’s said the label is “sharing the Napster settlement with its recording artists and songwriters, and at this stage nearly all settlement monies have been disbursed.”

The Universal spokesman spoke only of the label’s ‘policy’ of sharing “its portion of various settlements with its artists, regardless of whether their contracts require it” with no mention of whether it had actually done this or not.

But typically, when money is involved, things start to get murky. The same sources who suggested the reasons for the delay in making payments are also suggesting that there might not be much money to even give to the artists.

It’s being claimed that after legal bills were subtracted from the hundreds of millions in settlements, there wasn’t much left over to hand out.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.