About Megaupload’s Multi-Billion Dollar Project

April 18, 2012 by Yonah · Comments Off
Filed under: Announcements & Events, Entertainment Industry, File-Sharing Programs, Networks & Services, Legal P2P News & Issues

Kim Dotcom

Prior to its shutdown, Kim Dotcom’s company was getting ready to “take over” the US stock market with a multi-billion dollar IPO. Megaupload had a talk with some of the “Big Four” auditors and some of the world’s most important investment banks.

Prior to its shutdown, the company was guarded by a group of devoted lawyers that had a single purpose: to ensure the company’s legitimacy. In a talk with TorrentFreak Kim Dotcom said that his company was getting ready to enter the US stock market through one of the biggest tech IPOs of all times.

Before US authorities started their raid, Megaupload was negotiating with some of the world’s top accountancy firms “to become auditors and large international banks were interested in underwriting the public offering.” The company was also looking into becoming publicly listed via a reverse merger, where it would purchase a listed company.

Robert Lim – a corporate advisor from Hong Kong – was asked to help Kim Dotcom’s company with this goal, and he agreed to give detailed information to TorrentFreak on this matter.

“I started providing advice to Megaupload management on exploring and researching options on becoming publicly listed by IPO or back door listing and other fund-raising options in early 2011,” Lim says.

“I understand the management and some of the shareholders had been discussing and exploring these options even prior to this time.”
Planning an IPO is no piece of cake, and the whole process is taking a whole lot of time, but Dotcom’s company was dead serious.

“Megaupload management had discussion with a number of the ‘Big Four’ largest international professional accountancy firms, which handle the vast majority of audits for publicly traded companies. These Big Four firms were invited to be the auditor and to work together with management to build out a road map to prepare Megaupload for an IPO,” Lim continued.

“This included any management and corporate restructuring to enhance efficiency and management of the group, and to review and enhance internal controls and corporate governance processes in the company as needed. Basically, some of the essential key things private companies need to do to prepare for public listing.”

Furthermore, Megaupload was also trying to convince some of the world’s leading investment banks to assist with the IPO plan. Although TF could not make public the names of the banks after discussing with Kim, Lim confirms that they were very interested about the proposal.

“Most of the response was positive. As long as Megaupload provided the commitment and flexibility to follow the necessary road map recommended by the professional firms to prepare the company for an IPO, it should not have been a problem.”

“Despite the global economic downturn, the tech sector still seems to be providing the most successful IPOs. Therefore, underwriters said Megaupload had a good chance to be a very successful IPO, with an estimated valuation of at least a couple of billion US dollars,” Lim told TF.

Truth be told, Megaupload was growing at a fast rate and, without any doubt, it was a leader in its sector.

But another important part of Megaupload’s story, of what the company could have become, is what happened in early 2012 when US authorities decided to shut it down, arresting a handful of people connected to the former website. On this matter, Lim said:

“Objectively speaking, for the criminal case it brings up the question if there really was a so-called ‘Mega-Conspiracy’ among Megaupload management. It is clear Megaupload management was seriously exploring options for taking the company to public listing.”

“They also knew full well that it would require a lot of scrutiny, due diligence and review of the operations, financials and overall business model of Megaupload not only by the auditors / accountants, lawyers for regulatory filings and IPO underwriters, but also the various regulatory agencies which govern the stock exchanges and public markets.”

“This does not fit with the ‘Mega-Conspiracy’ concept that Megaupload management is accused of, including that they knowingly and secretly conspired to do and hide criminal activities in Megaupload,” Lim concluded.

It is true that such facts make us wonder whether the US government knew about Dotcom’s plans or not. However, Megaupload’s plans for the future are a testimony that the company truly believed in a transparent and legitimate business.

Tags: anti-piracy, copyright, copyright infringement, file sharing sites, file-sharing, legal, music industry

Turntable.fm Turns the Tables in its Favor: Signs Contract With 4 Major Labels

March 20, 2012 by Yonah · Comments Off
Filed under: Announcements & Events, Entertainment Industry

On Tuesday, at the SXSW festival Turntable.fm made the big announcement through co-founders Billy Chasen and Seth Goldstein: the company has signed licensing deals with all four major labels during a panel called “Turntable.FM: The Future Of Music Is Social”

If your dream is to be a DJ, Turntable.fm may be the place to start as it offers a chance to a handful of users to mix up for more than 200 listeners in virtual rooms, each having its own musical theme. Besides that, DJs can choose from a catalog provided by MediaNet, or even upload their own work, whether it’s something they’ve recorded or a bespoke remix.

As such, due to the nature of these services the licensing process was complicated. Before having any licenses signed, the service obtained $7.5 million in funding from Union Square Ventures and a positive feedback from both the press and the public. However, signing with the record labels was mandatory, if the service should survive the rough and unpredictable cyberspace.

“We went into it without being worried about [licensing]. I didn’t, and still don’t know what the DMCA [Digital Millennium Copyright Act] stands for,” said Goldstein.

“We didn’t know about the restrictions, the per-play rates, international [licensing differences], and the publishers, and the PROs [Performing Rights Organizations] — it was all gobbledegook … Intellectually, it [was] a huge challenge to navigate through a lot of these partnerships and label negotiations.”

Aided by digital music lawyer Debbie Newman, Goldstein and Chasen turned Turntable into a legitimate and hopefully profitable business. The service has already launched a mobile application for iPhone and iPad, so that you can listen to your favorite DJs wherever you go.

Tags: digital music, music industry

Last.fm And Musicmetric Shake Hands to Offer Artist Analytics Integration

March 16, 2012 by Yonah · Comments Off
Filed under: Announcements & Events, Entertainment Industry, Movies, MP3, Digital Audio & Games

UK’s Last.fm has recently announced its intentions to do business with data and analytics platform Musicmetric, integrating the latter into the Last.fm Music Manager.

Also located in Great Britain, Musicmetric offers tools for a better perspective on consumer behaviour to the people working for the music industry. It does that by drawing its power from p2p networks, review websites, comments and social networks, gathering data from as many sources as possible.

On the 13th this month Last.fm announced the integration at the SXSW Festival in Austin, Texas. Having Musicmetric merged with Last.fm’s platform will let artists track fans, plays and views across several online music and social platforms, including Last.fm, SoundCloud, Twitter and so on, and integrate third party analytics from Google Analytics, Facebook Insights, and soon to be added YouTube Insight. Furthermore, artists will have the chance to upgrade to Musicmetric’s Premium version for $5,99/month.

Last.fm was founded in 2002 and acquired by CBS in 2007. Currently it has about 40 million users spread across 200 countries. It offers new music and personalised radio and concerts to its users, while keeping a record of your listening behaviour from over 600 music players.

“By integrating Musicmetric’s analytics dashboard into Last.fm’s Music Manager, we’re now able to offer artists and labels access to improved data and information surrounding their fans social media presence and listening habits across the Web,” said Tom Lisack, Vice President, Content & Artist Relations, CBS Interactive Music Group.

“Last.fm’s purpose is to help emerging artists and this integration gives them unprecedented access to the tools they need to succeed online.”

Through Last.fm Music Manager, artists can promote their work by uploading tracks to Last.fm, access a record about who’s listening to their music, manage their profile and offer free track downloads. As for Musicmetric, they’ve launched a Musicmetric Pro version, featuring sentiment analysis and TV-appearance tracking.

“This integration is our first step into opening access for emerging artists to the kind of analytics previously only available to major companies,” said Gregory Mead, Musicmetric’s CEO.

“Having an idea of where fans are engaging with music by an artist, and where they can grow their level of visibility both online and offline is so essential to new or unsigned bands trying to cut through the noise today.”

Tags: digital music, last.fm, music industry

While Bombed With Copyright Lawsuits, Grooveshark Struggles To Maintain Its Services

March 14, 2012 by Yonah · Comments Off
Filed under: Announcements & Events, Entertainment Industry, File-Sharing Programs, Networks & Services, Movies, MP3, Digital Audio & Games

While the popular music service is engaged in legal battles with all giant recording labels, it’s also determined to maintain an open and unlimited platform that that would be beneficial for the copyright owners

It’s been a black year for Grooveshark so far as all major recording labels are suing the service on grounds that vary from contractual disputes to copyright infringement. While being dragged into litigation, Grooveshark will “strive to maintain an open and unlimited platform that accommodates the rightsholder,” reads a TorrentFreak report.

November 2011: Universal Music sues the streaming service for copyright infringement, claiming damages of hundreds of millions of dollars. Sony and Warner follow suit in December 2011, and this year started with EMI suing Grooveshark over a contractual dispute.

The anti-Grooveshark “campaign” extends even outside US’ borders, with a Danish ISP being court ordered to block all access to Grooveshark.

As for Universal Music’s claims, a Grooveshark insider told TorrentFreak that the accusations are false; on this matter, Grooveshark has always aimed for obtaining licenses all around the world, speaking directly to artists and continuously building a system that helps rights holders. Apparently, that’s not enough to please the record labels.

“Grooveshark wants to keep the platform Open. That is to say, even after all the deals are inked, the company wants artists to be able to share without having to go through a label. That’s Grooveshark’s definition of open,” TorrentFreak was told.

Another issue is that Grooveshark intends to keep their platform and musical market unlimited.

“That doesn’t mean that users don’t have to pay and it certainly doesn’t mean that record labels don’t get paid, but users might pay with their attention or their interaction, or (and I know this is controversial) with their data,” the insider said.

Having a user-base of over 35 million, Grooveshark can be a real asset to the record labels, if only they would know how to use it in their advantage; but things are not that simple when it comes to multi-billions dollars businesses, especially when conflict of interests unsettle the delicate pocket of a corporatist dinosaur.

“If a 13-year old kid can’t get access to music because she or he doesn’t have a credit card and Grooveshark can earn enough money to pay a record label off of a few survey questions then that should be net positive for the label, the artist, the user and Grooveshark,” TF’s source noted.

“The alternative is piracy.”

And speaking of money, the insider further details:

“As far as I can tell, it’s not that labels don’t want money. It’s that they don’t want Grooveshark’s type of money. They see that model as a slippery slope.”
“The last thing they want is for artists to be able to make a living in a way that undercuts the 1-to-1 value of recording to dollar. It’s seen as an attack on their power base, which is not what Grooveshark set out to do.”

Although Grooveshark is supporting equity and revenues sharing – aiming for a better business model that favors both record labels and consumers, Universal, Warner and Sony chose litigation over reason in what seems to be a dispute over the DMCA.

“The DMCA Safe Harbors are not a loophole,” Grooveshark’s insider said.

“They are necessary for the progress of society and are meant for situations EXACTLY like Grooveshark’s. It’s not something to use for protection or to hide behind. It’s meant to allow the development of technologies that are potentially revolutionary. That doesn’t mean that if you operate within them, you shouldn’t be expected to reward content creators for their work and that’s not what we want them to mean.”

“When record labels use threat of criminal prosecution as a negotiating tactic you are left with two choices; Continue working to improve the user experience, build tools for those rights holders that do want to participate and do your best to walk the straight and narrow of the law. Or stop innovating in an industry that is desperate for innovation.”

“Which is the principled position?”

Tags: digital music, Grooveshark, legal, music industry

Audiogalaxy: A Worthy Adversary For Pandora and iTunes Match

March 13, 2012 by Yonah · Comments Off
Filed under: Announcements & Events, Entertainment Industry

Based in Seattle, Audiogalaxy is a fresh online music product that offers both streaming and locker services, combining features of iTunes Match and Pandora.

Speaking to marketwatch.com Michael Merhej (founder of Audiogalaxy) said:
“Our service offers music fans a tunable music experience – play your own tracks anywhere without uploading, copying, or syncing, or lean back and start discovering music you don’t own via Mixes.”

In order to stream music directly from your computer, first sign up with Audiogalaxy, then install the “Audiogalaxy Helper” and you’re good to go. While Google, Amazon and other cloud-based services require hours of uploading, Audiogalaxy scans up to 200.000 songs, and streams them to other web browsers via peer-to-peer. A feature that is similar to iTunes Match, but lacking a signed contract between Audiogalaxy and the record labels.

Speaking of unwise features, “Free Mixes” allows users to “go beyond their own collections to stream ad-free music curated from millions of songs and customized to their tastes”, only that the music library is not licensed by the record labels, but instead relies on other users’ collections, which may contain more or less legitimate content. However, according to this report the service has signed up with SoundExchange, ASCAP, BMI, and SESAC.

Audiogalaxy’s history goes far back, starting with 2002 when it was a file-sharing service, and is not without controversy. In fact, Audiogalaxy was shut down after a copyright infringement lawsuit. Eric Garland (former CEO of BigChampagne and now an executive at Live Nation Labs) said:

“I’ve been using Mixes as a beta tester, and I listen to it every day. It’s exciting to see innovation in this space, especially when the focus is on engaging fans.”
It’s going to be interesting to follow Audiogalaxy’s fate, as the RIAA is probably planning its takedown already.