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Seeqpod's turn to be sued

Seeqpod_logo Warner Music Group's lawsuit against Seeqpod, like Viacom's $1 billion claim against YouTube, raises intriguing questions about how the Digital Millennium Copyright Act applies to sites that rely on copyrighted media furnished by users. I'm going to skip the legal discussion, though, to ponder a related policy question: Should Internet-based music businesses be able to avoid paying copyright holders based on purely technological differences in the delivery of their product?

As much as Seeqpod likens itself to Google for legal reasons, the more apt description is that it's a cross between a free online jukebox (a la the remodeled Last.fm, iMeem or free.napster.com) and a webcaster. Plug an artist or track name into the search box, and Seeqpod returns a list of matching links. Sometimes it can't find any -- it doesn't have a central library of music, but rather scours the web for songs posted by others -- but most of the time it will at least come close. Clicking on a link causes the song to play on the Seeqpod site. Alternatively, users can tap into the links generated automatically by the site's "PodCrawler," a random collection of tracks, or they can call up a list of tracks similar to ones that they like. There are no advertisements on the site, at least not yet, but that's not for lack of opportunity to sell them.

In short, although Seeqpod doesn't aggregate tracks on its site a la iMeem et al., from the user's perspective it's not much different functionally. Put simply, it's an on-demand music service curated by users, not a program director or label-relations staff. (The Seeqpod blog talks about its ability to return and play a variety of search results -- blogs, images, Wikipedia posts -- yet the site is set up to deliver musical entertainment. The PodCrawler presents links to songs and music videos, after all, not random Wikipedia entries.) So why, when all its competitors in this field are forced to pay royalties, shouldn't Seeqpod?

You might argue (and please do) that copyrights don't exist to create level competitive playing fields. The purpose, as the Constitution points out, is to encourage the creation and dissemination of art. Still, we tend to think of encouragement in financial terms. That means the creator of a work gets a piece of the economic activity that flows from it, both direct (e.g., the sale of a downloadable single) and indirect (e.g., the music in a nightclub that helps attract customers). Seeqpod argues that it isn't really performing or distributing copyrighted works, it's merely helping people find them. Yet when Seeqpod users play songs, they do so on Seeqpod's site, creating an audience which the company can leverage to sell advertisements. Without music, what is Seeqpod's business model?

You might also argue that Seeqpod represents the next generation of over-the-air radio, which has never paid royalties to the record labels (although stations do pay royalties to songwriters, and Seeqpod doesn't). Radio stations historically were exempted from paying royalties because they provided a different sort of compensation, namely, promoting the sale of singles and albums. But that argument is less persuasive today, given the deepening slump in revenue from music sales. That's why labels and artists are pushing Congress to end the royalty exemption for over-the-air radio. What compensation does Seeqpod offer? The exposure artists receive is valuable, particularly through Seeqpod's Discover function, which lets people find songs similar to the ones they like. But Seeqpod undermines that value by providing links to free (and, most likely, unauthorized) copies of each song, rather than offering an option that pays copyright owners.

Seeqpod's music service is compelling, and it's technology is pretty nifty. Anyone who remembers the MP3 search engines from a few years back will be impressed by Seeqpod's ability to find links that actually work. Having users provide the tracks may leave gaps in the library, but it also brings in alternate versions of songs, rarities and other goodies overlooked by services that rely on the labels to supply their music. And it's conceivable that Seeqpod has a winning legal argument, based on the DMCA's safe harbors. Still, it's hard to look at Seeqpod and not see another entry into the online music business. If Yahoo has to pay royalties for its music services, why not Seeqpod? What's the rationale, other than consumers' love of all things free?

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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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