by Playfuls Staff |
15th September 2006
Universal Music, world’s largest music publisher, is losing a lot of money from materials published without authorization on popular sites like MySpace or YouTube, so it is apparently set to take legal actions against them.[more]
Apparently the company is not only after MySpace or YouTube but also after other sites that post copyrighted materials without paying the legal fees to the music giant.
Jessica Reif Cohen, a Merrill Lynch analyst, wrote in a note to clients Thursday that remarks two days before by Universal Chief Executive Officer Doug Morris meant Universal was getting set to sue not just the popular Web site, but possibly others that like YouTube rely on user-generated content.
What Morris told a group of financial analysts on Tuesday, according to a Reuters report, was that YouTube was a "copyright infringer" that allegedly owes Universal tens of millions of dollars in royalties. Universal is a division of French media conglomerate Vivendi SA.
"We believe these new businesses are copyright infringers and owe us tens of millions of dollars,"Universal Music CEO Doug Morris told investors Wednesday at a conference in Pasadena."How we deal with these companies will be revealed shortly."
Universal's talks with YouTube Inc. have deteriorated and the recording giant is set to file a copyright infringement lawsuit against the video-sharing company if no agreement is reached by the end of the month, according to a person familiar with the talks who spoke on condition of anonymity, citing the confidential nature of the negotiations. On the other side, Universal's talks with News Corp.'s MySpace have been progressing, the person said.
Surprisingly, a Universal spokesman said Thursday that Morris never threatened legal action and was merely answering a question from the audience about negotiations between Universal and YouTube.
Morris' speech was closed to the press and public, but the Universal spokesman confirmed the core message included in the statements.
Universal’s latest movements seem at least odd, since Vivendi Universal has recently announced that it will offer its music catalogue for free legal download, after reaching an agreement with New York-based startup Spiralfrog.
Universal has agreed to let music website SpiralFrog.com download all its catalogue for free for the next two years. The deal is conditional on the outfit using DRM from Microsoft, which was conveniently broken yesterday. The content will not play on the iPod.
Under the agreement, Spiralfrog will offer Universal's songs online in the US and Canada and make its money by carrying adverts on the site.
The plan, which is to go live in December, is the latest bid to challenge the popularity of the market-ruling Apple iTunes store which currently charges 99 cents a download. The new service also hopes to entice users away from the illegal free file sharing sites.
In addition to Universal's artists, which include U2 and Kanye West, SpiralFrog is seeking to license the catalogs of Sony BMG Music Entertainment, Warner Music Group and EMI Group.
Still, there is a catch: users won't be allowed to burn songs to a CD. Users also will have to visit the SpiralFrog website once a month to watch more ads. Otherwise, digital locks on the music will make it inaccessible.
