1709 Blog: for all the copyright community

Friday, 28 September 2012

MegaBox - barely legal or clearly legal?

I will preface this Blog by saying (a) I am not sure I quite understand the technology of what I am writing about and (b) it will therefor be brief - those interested can use the links - or make a more informed comment on this site!


Kim 'Dotcom' Schmitz, currently on bail in New Zealand awaiting extradition to the USA on criminal copyright infringement charges (see the 1709 Blog here and here),  has announced a new service - the MEGABOX -  and the linked MEGAKEY - which will seemingly allow artists to sell their creations direct to consumers and allow artists to keep "90 percent of earnings" with Dotcom telling TorrentFreak “We have a solution called the Megakey that will allow artists to earn income from users who download music for free,” adding  “Yes that’s right, we will pay artists even for free downloads. The Megakey business model has been tested with over a million users and it works. You can expect several Megabox announcements next year including exclusive deals with artists who are eager to depart from outdated business models”.

I did some checking and the idea isn't actually new - Dotcom had already launched a MegaKey in 2010 linked back to his MegaUpload service, and again was highlighting the app in June 2012, but this seems to be a new version - or at least another relaunch. And  Dotcom now boasts that musicians using his service will retain "90% of all earnings" and "generate significant income from the untapped market of free downloads". How so? Can Dotcom really eradicate music piracy and rebuild the music industry with one click of a mouse?

Megakey generates income by replacing about 15 percent of advertisements ("a small percentage") displayed on web pages visited by those who have it installed with ads hosted by Megabox - blocking ads on the site and replacing them with Mega's ads - a process described as being similar to malware - and described by one commentator as at best 'not clearly illegal'. Users who don't want to download the MegaKey can buy the music instead and I presume here Mega will take a small cut of the sale price. So what's the position with copyright for websites whose visitors don't view the ads they have carefully displayed to earn revenue - as the visitors instead seemingly instead see ads superimposed by the user's MegaKey, blocking the site's advertising? 

To be clear - this is NOT an issue about music and sound recordings being infringed - its about the right(s) of website owners to determine what a visitor sees when they visit their site - and that is far from clear what, if any, legal remedies site owners have against MegaBox.  In the USA include the dynamic nature of website design and appearance - and the fact many websites never register any 'artistic' copyrights related to the design and appearance of their site might well lead to problems although a related case from 2002, 1-800 Contacts v WhenU might shed some light in this whole tricky area but claims of copyright violation seem at best arguable. For more see  http://www.digitaltrends.com/music/megabox-is-probably-illegal/

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