MP3tunes.com, a service which let users put their personal music collections online in a “locker,” then made those songs available on any device, has declared bankruptcy.
Founder Michael Robertson blames an expensive and time-consuming four-year legal battle with EMI Records.
EMI sued the company back in 2007, arguing that building this kind of service without licenses was copyright infringement.
Since then, Amazon and Google have launched very similar services with no licence agreements. MP3tunes also won a pretty big legal judgment last summer, where a judge basically threw out most of EMI’s case.
But none of this helped because, according to Robertson, MP3tunes couldn’t keep up with EMI’s legal assault.
For instance, he writes:
One example is the interrogation of company employees in all-day inquisitions called depositions where attorneys try to trick people into making admissions. In our case, they deposed not just management but nearly everyone in the company all the way down to clerical help and customer support personnel. They even paid $25,000 to get an ex-employee to agree to a deposition. For management they deposed everyone – some multiple times with me getting deposed 3 separate times.
Overall, Robertson estimates EMI spent more than $10 million on the fight.
Robertson claims that the record industry has done this before, and it often works:
This happened with the music search engine Seeqpod, Muxtape, Favtape and many others that have quietly faded away. They [the music labels] know that even if the digital upstart prevails in court, they will be terminally weakened. Veoh won multiple rounds of their copyright battle outright only to be forced into bankruptcy after spending $7 million on legal bills.
Robertson obviously has a bone to pick. But his story is a good warning to any entrepreneur considering a music startup, or any investor considering backing one.
EMI’s press department could not be reached for comment.