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Kim Dotcom’s Megaupload heyday is ancient history for the music industry

You might expect champagne corks to be popping within major music labels at the news that a New Zealand court has ruled Kim Dotcom can be extradited to the US to face charges of copyright infringement, racketeering and money laundering.

In his heyday at cloud storage service Megaupload, Dotcom became a cartoon villain for music rightsholders – and their compatriots in the film, games and software industries – as they saw the company as a haven for illegal filesharing. Yet that heyday is ancient history for a music industry that has been going through an intense period of digital disruption in recent years. Dotcom was arrested and his site shut down nearly four years ago, in January 2012.

At that time, “cyberlockers” like Megaupload and Rapidshare were seen as a menacing piracy threat by many labels, spooked by the prospect of millions of fans getting music for free by following links to these services rather than buying CDs or downloads.

Megaupload never came back from that January raid, while RapidShare closed down in March 2015 after its attempts to crack down on copyright infringement simply made its users (and revenues) drain away.


Bigger cloud storage services like Dropbox and Google Drive have not been demonised by the music industry, even though they can in theory be used to share music in a similar way. That’s because the industry’s anti-piracy attention has moved elsewhere.

The bodies representing music labels still care about piracy enough to pursue companies into court. Unlicensed streaming service Grooveshark closed down earlier this year after losing a copyright-infringement case brought by US labels.

More recently, filesharing app Aurous also shut down, after its developer was taken to court by labels, having only been available for a few days.

In the UK, industry body the BPI has focused its efforts on getting high-court orders forcing ISPs to block access to a range of filesharing sites, including The Pirate Bay and KickassTorrents. It has also regularly pressed Google to do more to downgrade piracy sites in its search-engine results, securing an initial promise from the company to do that in August 2012, followed by action against “some of the most notorious sites” in October 2014.

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Piracy still irks music rightsholders, then, but you’ll rarely find it being discussed at industry conferences, let alone Kim Dotcom. You’re more likely to hear executives training their verbal fire on streaming services like YouTube and SoundCloud, both of whom are perceived in some quarters to be using “safe harbour” laws to avoid paying their fair share of royalties for the music streamed by their users.

Music executives are also less likely to be fretting about piracy in 2016 than they are about how to persuade more people to pay to subscribe to streaming services like Spotify, Apple Music and Google Play Music – with Spotify in particular facing questions this year about whether it could persuade more of its free listeners to upgrade.

Meanwhile, companies exploring ways for musicians to make money directly from fans – Bandcamp, Patreon,Songkick, and more – are growing slowly but surely; and there’s a lively debate about the role that blockchain technology might play in ensuring musicians are paid fairly for their work in the future.

Katy Perry and Shakira are making mobile games; Rufus Wainwright andRudimental are exploring fanclub-like apps (and charging for it in the former’s case); Björk is experimenting with virtual reality; Spotify is helping some artists email ticket offers to their keenest streaming fans; Turkish music videos are the most popular channel on YouTube; the BBC is planning its own streaming service; music video service Vevo is making a move towards subscriptions

Few of these things are big earners yet, but they are all much more interesting – and positive – topics in the music industry’s evolution than piracy. And certainly more than the kind of piracy that Kim Dotcom is accused of encouraging at Megaupload.

His trial – if a likely appeal against the extradition ruling fails – will still make plenty of headlines in 2016, but it’s a positive sign that it will be a diverting sideshow rather than the main event of continuing to figure out how to persuade more people that music is worth paying for, and how to ensure that musicians get their fair share of the resulting income.


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