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How Major Labels Try To Overwhelm Startups

How Major Labels Try To Overwhelm Startups

I want to give everyone an inside look at some of the tactics that EMI is employing in their legal assault to try and put MP3tunes out of business. Casual readers might think this case is about piracy or file sharing, but it's not. (People don't use our password-protected Lockers to share files - it's too restrictive. There are much easier ways.)

To pound a tech startup into submission the major record labels try to bury them with legal threats, pressure their partners and impose massive document requests. These actions are disguised as "legally permitted discovery", but the goal is to force the company to spend time and money to disrupt their business and maybe even destroy them.

I've uploaded the complete list of EMI demands sent to us this week here and here, but I've made it easier by pasting a few of their demands below. As you're reading these think about how your business could/would operate if these demands were made of you. Ask yourself: "how are these demands relevant to the legality of storing music in the cloud?"

Partial List of EMI Discovery Requests

  • Provide all copies of each digital music file, and any metadata associated with such files, stored using MP3tunes' services.
  • [ They are again demanding copies of all files from every Locker. This is now over 300 terabytes of storage! ]

  • Provide all Documents concerning the functionality, development, and operation of MP3tunes' storage of user files; sideload feature; and streaming, play, download, and locker-sync features.
  • [ This would encompass most communications within our company. ]

  • Provide the full name and address of all individuals or entities with which MP3tunes has entered into contracts or other beneficial arrangements related to,, or MP3tunes software, including any paid consultants.
  • [ Presumably we don't enter into arrangements that are not beneficial so this would encompass every individual or entity we have had any meaningful contact with. ]

  • Provide all Documents concerning any agreements or communications with any person or entity with whom you have had any agreement to share revenue, strategic partnership agreement, joint venture, or any other arrangement related to MP3tunes, by which you expect to or may receive revenues, or through which expenses or development efforts are or may be shared, including but not limited to Nokia, Logitech, Reciba [sic], Chumby, NOXON, Tivo, and Ripshark, including all documents concerning any financial arrangements between you and such persons or entities.
  • [ This would be just about every communication with any partner of our company. ]

  • Provide the full name and last known contact information of any present or past employee of MP3tunes, along with the dates of employment and the employee's title or short description of the employee's responsibilities. Provide all Documents concerning MP3tunes' employment of Emily Richards and Doug Reese, including but not limited to personnel files.
  • [ They're trying to dig up former employees who they might encourage to say something negative. Going through private personnel files is just wrong! ]

  • Provide all Documents concerning the financial books and records, including but not limited to general ledgers, accounts receivable and payable, income ledgers, and balance sheets, for MP3tunes.
  • [ All financial documents related to the company. ]

There are many other far-reaching demands for documents related to: marketing, advertising, promotional plans, business plans, revenue projections, sources of revenue, MP3 technology and the music industry. But, hopefully, this is enough to illustrate the point. These legal demands have nothing to do to the fundamental question of whether a company can help a user store their music collection in the cloud so they can play it anywhere.

The legal process can be extraordinarily burdensome and expensive. This is especially true when one side has more legal resources and is not focused on having the issues heard but on imposing as much pain and cost as possible to the other side. This almost always seems to be the case when big media companies target small tech startups with lawsuits (like EMI is doing with MP3tunes).

Our case is about the record labels trying to destroy a business they do not like because it gives power to consumers to listen anywhere without paying the labels for every device or for every song play. Regular readers know that the major record labels often personally sue CEOs to put pressure on them by threatening their home and their family life. This didn't work in our case so now they are moving to a new tactic - burying us with legal demands.

Over the last decade attorneys for major record labels have honed their skills at imposing enormous pressure on small startups –via the courts– so they can force them to collapse and settle before the Judge can rule on the legality of new technology. We're going to keep battling on this issue and for your privacy and the right to put your music in the cloud and listen anywhere.

We want to reassure all of our customers that we will continue to do whatever we can to protect their privacy. We feel that the data in your Lockers (and about you) is personal and private and is not relevant to this copyright case. We will continue to innovate and develop new products and services that let you, the customer, do what you want with your music. (For example: check out Load2Mobile. This new service lets you pick any song off your hard drive and send it right to your mobile phone!)

If you already have a Locker I hope you'll put some music in it and try our new PiMP interface. If you don't have a MP3tunes Locker yet, I hope you'll sign up and check it out. If you type the coupon code: Premium1 you can get $10 off a Premium 50 yearly Locker if you sign up in the next 3 days.

We thank you for your continued support. It really means a lot to us.

-- MR

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