The Megabox: was this the real reason for Megaupload’s shut down?

Weeks before the takedown of file-sharing giants Megaupload, the site’s founder had announced their plans to create an “alternative music store”.

In an piece with Torrentfreak [via Digital Music News, via Shauna Myers], Kim Dotcom revealed his plans to directly compete with Universal Music Group “via our own music venture called Megabox.com, a site that will soon allow artists to sell their creations directly to consumers while allowing artists to keep 90 percent of earnings.”

If Dotcom’s to be believed, then not only would Megabox have allowed artists to keep a higher percentage of earnings than 99% of record labels, it would pay them for songs they let users download for free. Given the site’s popularity – it was once the 13th most visited website on the net – there’s no reason to think that had this happened, it wouldn’t have been serious competition for Universal and more.

“We have a solution called the Megakey that will allow artists to earn income from users who download music for free,” Dotcom outlined. “Yes that’s right, we will pay artists even for free downloads. The Megakey business model has been tested with over a million users and it works.”

Megaupload was shut down last Thursday evening, causing hacking group Anonymous to retaliate by taking down a series of websites including Universal Music Group and the RIAA. Kim Dotcom is currently awaiting charges from the US government, and could face 20 years in jail.

This entry was posted on Tuesday, January 24th, 2012 at 3:10 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed.

  • David Ricketts

    How is this different than the service that TuneCore offers?  That
    service has been around for years and doesn’t appear to have caused any
    major problems with the record labels.  It seems that if MegaUpload was
    taken offline due to the “MegaBox” that it was the idea that you can get
    paid for free downloads that was the major issue.  Although, mostly it
    seems that Universal is pissed because they didn’t figure it out first
    or because it was creating an alternate store for purchasing, as opposed
    to using established digital music retailers as TuneCore does.

  • http://pulse.yahoo.com/_SW5VSY2NNHPM4XH665NZ6VSQVQ Peter

    Aside from the free part, it doesn’t sound like this would have gone through “traditional” digital distributors such as iTunes, sales would instead go directly through Megabox.  But I wouldn’t be surprised if the shutdown had nothing to do with it, it’s just a very slightly less misguided and uninformed impulse than sueing college students.

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