Playlist sharing site FIQL has figured out a novel way for people to share music without paying a penny for song royalties or streaming bandwidth: By embedding music videos that people have uploaded to free video sites like YouTube (GOOG) into a custom video player.
The NY-based startup’s new FIQL TV service, which launched today, lets you type in a music playlist, searches video sites for the right music videos, and then spits out a custom Flash player with embedded videos. You can link someone to the playlist or embed it on a Web site or MySpace (NWS) page. (After the jump, we’ve embedded one of their featured playlists: “Feeling depressed? Feeling like dying??“)
The potential problem is that many of those videos were uploaded in violation of copyright law, and by profiting from that copyright violation, FIQL could also be breaking the law. A cottage industry already exists on the Web of sites embedding — but not physically hosting — illegally-uploaded TV episodes, and profiting from ads surrounding the videos. My former Forbes.com colleague Andy Greenberg wrote a story about them last November; since his piece ran, four sites he linked to (like “Daily Episodes” and “All Simpsons”) have either shut down or have had to switch domains. (“All South Park,” whose videos are hosted on sites like France’s DailyMotion, appears to have resurfaced at a new site.)
To be sure, record labels upload many music videos to sites like YouTube as a promotional effort. But many are still posted illegally. At TechCrunch, former lawyer Mike Arrington acknowledges that “technically FIQL is still subject to copyright claims,” but then argues that FIQL is “under little real threat of litigation.” But the problem for startups like FIQL is that they’re rarely equipped financially to deal with any kind of legal threat from deep-pocketed copyright owners, regardless of their legal standing. We wish them well but advise them to tread carefully.