A few months ago I wrote about the wonderful site Muxtape here. It was not long for this world. I’ll append below a summary of its story from its founder, Justin Ouellette; to whet your interest, here’s an interesting paragraph on fair use indeterminacy:
I talked to a lot of very smart lawyers and other people whose opinions on the matter I respected, trying to gain a consensus for Muxtapeâ€™s legality. The only consensus seemed to be that there was no consensus. I had two dozen slightly different opinions that ran the gamut from â€œMuxtape is 100% legal and youâ€™re on solid ground,â€ to â€œMuxtape is a cesspool of piracy and I hope youâ€™re ready for a hundred million dollar lawsuit and a stint at Rikerâ€™s.â€
Okay, here’s Ouellette’s story:
I love music. I believe that for people who love music, the desire to share it is innate and crucial for music itself. When we find a song we love, we beckon our friends over to the turntable, we loan them the CD, we turn up the car stereo, we put it on a mixtape. We do this because music makes us feel and we want someone else to feel it, too.
My goal with Muxtapeâ€™s design was to translate some of that tactility into the digital world, to build a context around the music that gave it a little extra spark of life and made the holder anxious to listen.
. . . . Three weeks of long nights later, I launched Muxtape. It was successful very quickly. 8,685 users registered in the first 24 hours, 97,748 in the first month with 1.2 million unique visitors and a healthy growth rate. Lots of press. Rampant speculation. . . .
There was a popular misconception that Muxtape only survived because it was â€œflying under the radar,â€ and the moment the major labels found out about it itâ€™d be shut down. In actuality, the labels and the RIAA read web sites like everyone else, and I heard from them both within a week or so. An RIAA notice arrived in triplicate, via email, registered mail, and FedEx overnight (with print and CD versions). They demanded that I take down six specific muxtapes they felt were infringing, so I did.
Around the same time I got a call from the VP of anti-piracy at one of the majors. After I picked up the phone his first words were, â€œJustin, I just have one question for you: where do I send the summons and complaint?â€ The conversation picked up from there. There was no summons, it was an intimidation tactic setting the tone for the business development meeting he was proposing, the true reason for the call. Around the same time another one of the big fourâ€™s business developers reached out to me, too.
In the end, Muxtapeâ€™s legality was moot. I didnâ€™t have any money to defend against a lawsuit, just or not, so the major labels had an ax over my head either way. I always told myself Iâ€™d remove any artist or label that contacted me and objected, no questions asked. Not a single one ever did. On the contrary, every artist I heard from was a fan of the site and excited about its possibilities. I got calls from the marketing departments of big labels whose corporate parents were supposed to be outraged, wanting to know how they get could their latest acts on the home page. Smaller labels wanted to feature their content in other creative ways. It seemed obvious Muxtape had value for listeners and artists alike.
In May I had my first meeting with a major label, Universal Music Group. I went alone and prepared myself for the worst, having spent the last decade toeing the indie party line that the big labels were hopelessly obstinate luddites with no idea what was good for them. Iâ€™m here to tell you now that the labels understand their business a lot better than most people suspect, although they each have their own surprisingly distinct personality when it comes to how they approach the future. The gentlemen I met at Universal were incredibly receptive and tactful; I didnâ€™t have to sell them on why Muxtape was good for them, they knew it was cool and just wanted to get paid. I sympathized with that. I told them I needed some time to get a proposal together and we left things in limbo.
A few weeks later I had a meeting with EMI, the character of which was much different. I walked into a conference room and shook eight or nine hands, sitting down at a conference table with a phonebook-thick file labeled â€œMuxtapeâ€ laying on it. The people I met formed a semi-circle around me like a split brain, legal on one side and business development on the other. The meeting alternated between an intense grilling from the legal side (â€œyou are a willful infringer and we are mere hours from shutting you downâ€) and an awkward discussion with the business side (â€œassuming we donâ€™t shut you down, how do you see us working together?â€). I asked for two weeks to make a proposal, they gave me two days.
I had to make a decision. As I saw it I had three options. The first was to just shut everything down, which I never really considered. The second was to ban major label content entirely, which might have solved the immediate crisis, but had two strong points against it. The first, most visibly, was that it would prevent people from using the majority of available music in their mixes. The second was that it did nothing to address the deeper questions surrounding ownership and usage for everyone else who wasnâ€™t a major label: mid-size labels and independent artists who have just as fundamental a right to address how their content is used as a large corporation, even if they donâ€™t carry quite as big a stick.
The third option was to approach a fully licensed model, which I had been edging toward since I met with Universal. I knew other licensed services so far had met with mixed success, but I also knew Muxtape was different and that it was at least worth exploring. The question about whether or not the labels saw value in it had been answered, the new question was how much it was going to cost.
It was June. I approached a Fifth Ave law firm about representing me in licensing negotiations with the major labels, and they took me on. Two weeks later I met with all four, flanked by lawyers this time, and started the slow process of working out a deal. . . .
The first red flag came in August. Up until then all the discussion had been about numbers, but as we closed in on an agreement the talk shifted to things like guaranteed placement and â€œmarketing opportunities.â€ I was denied the possibility of releasing a mobile version of Muxtape. My flexibility was being constricted. I had been worried about Muxtape getting a fair deal, but my biggest concern all along was maintaing the integrity and experience of the site (one of the reasons I wanted to license in the first place). Now it wasnâ€™t so simple; I had agreed to a variety of encroachments into Muxtapeâ€™s financials because I wanted to play ball, but giving up any kind of editorial or creative control was something I had a much harder time swallowing.
I was wrestling with this when, on August 15th, I received notice from Amazon Web Services (the platform that hosts Muxtapeâ€™s servers and files) that they had received a complaint from the RIAA. Per Amazonâ€™s terms, I had one business day to remove an incredibly long list of songs or face having my servers shut down and data deleted. This came as a big surprise to me, as Iâ€™d been thinking that I hadnâ€™t heard from the RIAA in a long time because I had an understanding with the labels. I had a panicked exchange of emails with Amazon, trying to explain that I was in the middle of a licensing deal, that I suspected it was a clerical error, and that I was doing everything I could to get someone to vouch for me on a summer Friday afternoon. My one business day extended over the weekend, and on Monday when I wasnâ€™t able to produce the documentation Amazon wanted (or even get someone from the RIAA on the phone), the servers were shut down and I was locked out of the account. I moved the domain name to a new server with a short message and the very real expectation that I could get it sorted out. I still thought it was all just a big mistake. I was wrong.
Over the next week I learned a little more, mainly that the RIAA moves quite autonomously from their label parents and that the understanding I had with them didnâ€™t necessarily carry over. I also learned that none of the labels were especially interested in helping me out, and from their perspective it had no bearing on the negotiations. I disagreed. The deals were still weeks or months away (an eternity on the internet) meaning that at best, Muxtape was going to be down until the end of year. There was also still the matter of how to pay for it; getting investment is hard enough in this volatile space even with a wildly successful and growing web site, it became an entirely different proposition with no web site at all.
And so I made one of the hardest decisions Iâ€™ve ever faced: I walked away from the licensing deals. They had become too complex for a site founded on simplicity, too restrictive and hostile to continue to innovate the way I wanted to. Theyâ€™d already taken so much attention away from development that I started to question my own motivations. I didnâ€™t get into this to build a big company as fast as I could no matter what the cost, I got into this to make something simple and beautiful for people who love music, and I plan to continue doing that. As promised, the site is coming back, but not as youâ€™ve known. Iâ€™m taking a feature that was in development in the early stages and making it the new central focus.
Muxtape is relaunching as a service exclusively for bands, offering an extremely powerful platform with unheard-of simplicity for artists to thrive on the internet. Musicians in 2008 without access to a full time web developer have few options when it comes to establishing themselves online, but their needs often revolve around a common set of problems. The new Muxtape will allow bands to upload their own music and offer an embeddable player that works anywhere on the web, in addition to the original muxtape format. Bands will be able to assemble an attractive profile with simple modules that enable optional functionality such as a calendar, photos, comments, downloads and sales, or anything else they need. The system has been built from the ground up to be extended infinitely and is wrapped in a template system that will be open to CSS designers. There will be more details soon. The beta is still private at the moment, but that will change in the coming weeks.
I realize this is a somewhat radical shift in functionality, but Muxtapeâ€™s core goals havenâ€™t changed.
One question here regarding potential IP jujitsu here: could Ouellette have gotten a patent here on the process of making the muxtape, then used that as a bargaining chip in negotiations? Without such a bargaining chip (which could be a blocking patent), it seems that innovators like him are always going to get steamrolled by the major labels.