Universal Music Group Sues MySpace over Music Videos

November 22, 2006
By Bill Rosenblatt

Universal Music Group (UMG) followed through on prior threats and sued MySpace last Friday for copyright infringement over music videos posted to the site.  The suit was filed shortly after MySpace announced that it would be implementing acoustic fingerprinting technology to filter out copyrighted music from the site. 

There are two primary reasons for this litigation.  One is an almost emotional issue for record companies: the residual feeling that MTV held them for ransom.  When MTV appeared in the 1980s, it became necessary for record companies to go to the time and expense of producing videos for their big stars -- with no direct compensation.  The music industry has been determined to prevent this happening again.  MySpace is particularly relevant here, because it has effectively supplanted MTV as the music destination of choice for young fans.

The other reason for the litigation is as a negotiating tactic over the much larger issue of MySpace selling major-label music on its site.  As we have mentioned, MySpace set up a framework two months ago to enable musicians and labels to sell music directly from the site -- though not with DRM.  Major labels that insist on DRM must get MySpace users to click over to other sites, such as iTunes and Amazon, to buy their products. 

The major labels fear that MySpace's enormous drawing power among their target audience will force them to do something that may be more objectionable than producing music videos for free: to sell music without protection.  They were able to effectively force Napster, with its reputed 26 million users just before shutting down, into a DRM-based model: today's Napster is in essence a rebadging of pressplay, which was set up by UMG and Sony Music around 2000.  With MySpace, more than four times the number of users are at stake, a market that UMG and the other majors cannot ignore in any way. 

UMG has licensed P2P services, such as iMesh, which use acoustic fingerprinting technology that is functionally similar to the technology MySpace is adopting.  But MySpace is not comparable to a file-trading network, and more importantly, the stakes are higher here.  The question of DRM and MySpace promises to be a tipping point for the music industry in the coming months.