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December 20, 2006

I Wish Google Could Buy AllofMP3

Michael Arrington

54 comments »

A number of record labels finally pulled the trigger and filed suit against Russian music site AllofMP3 today. The lawsuit was filed in New York. Given that AllofMP3 maintains that it complies with Russian law, it might not be a stretch to assume that AllofMP3 won’t be showing up for their day in (a U.S.) court.

AllofMP3 is still in business, but under a triage of attacks. Their own government sold them out in U.S. trade negotiations, promising to shut them down. Visa and MasterCard stopped accepting credit card transactions from the site. And now the record labels are on the case.

All of this is great marketing for AllofMP3, but it’s unclear how long the service will last under this kind of pressure. Whatever happens, though, something else will spring up in its place. At the end of the day, the labels will have to choose between suing a very large percentage of the world’s citizens, or else finally coming up with a digital music model that makes sense (meaning, no DRM).

It’s too bad that AllofMP3 is too hot for even Google to handle. After seeing how they’ve bribed, bullied and basically generally rightsholders after the YouTube acquisition, its nice to imagine what they could do on our behalf if they were running AllofMP3 as well. More from Techdirt.

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This entry was posted on Wednesday, December 20th, 2006 at 10:16 pm and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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Comments

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  1. Eric B

    December 20th, 2006 at 10:28 pm

    I wish AllofMp3 actually paid money to the artists. And no, not the barely existent royalty payments they pay to the Russian equivalent of the RIAA for their “broadcasting rights”.

    Their argument that they’re legal seems to be “Hey, we’re pretty sure we’re legal because broadcasting isn’t well defined under Russian law, but we might not be legal.”

  2. Michael Air

    December 20th, 2006 at 10:35 pm

    I’ve read a few reports about the mastercard/visa issue but that doesn’t seem to be the case. AllofMp3 can still accept credit card payments.

    Also, haven’t the record labels already tried (unsuccessfully) taking AllofMp3 to court?

  3. roger

    December 20th, 2006 at 11:07 pm

    wow, that was hard. i got curious and got an account on allofmp3.com.

    michael arrington is right: you can’t pay with credit cards (anymore). if you follow the credit cards link, you’ll eventually get a “woops” message. to buy stuff on allofmp3.com you have to fill up your account, and the only way to do that right now is to buy a cash card from one of their partners, which will send you over to a 3rd level partner, and that one will take your Visa or Mastercard. Pretty scary stuff, esp because the last one asks for fun details such as your date of birth (no kidding).

    the good news is there’s lots of music on allofmp3.com, so once you have funds in your account, it’s fun browsing. after buying music, however, you have to wait for the track to encode if it hasn’t previously been purchased (took about 30 seconds for one track i bought), then download each track individually. i just bought an album with 18 tracks and don’t have the energy to kick off 18 downloads. Maybe their expert download tool can lessen that pain.

    all in all, a pretty painful experience.

  4. lemon obrien

    December 20th, 2006 at 11:08 pm

    tamago, get paid to consume.

  5. Fashion Industry Ceo

    December 20th, 2006 at 11:23 pm

    how much do you think the company would be valued at michael?

  6. PPC Keyword Tool

    December 20th, 2006 at 11:46 pm

    I must say the artists receiving a decent direct royalty seems most important to me, though this appears to have been impossible to setup in the US / Europe etc in any case, with the number of middlemen involved in the recording/distribution industry.

    On a side note, I wonder how many paying users Allofmp3 actually has? Even if I was interested in joining, I’m sure not in any hurry to go handing out all my personal details to gain access as Roger mentioned above…

  7. Fredrik

    December 21st, 2006 at 1:23 am

    Lets add some info for this story (and try not to laugh to hard, it’s actually sad that judges have so little technical competence): In Denmark, all ISP have to block allofmp3 because of the fact that one ISP lost on court. The court went with the copyright owners (RIAA equivalent, can’t recall their name) and said in their verdict that:

    A copy of the illegaly downloaded copyrighted material available on allofmp3 exists in the ISPs routers, even for just a fraction of a second, when their customers download the songs. Therefore, the ISP is also breaking the copyright law, and illegaly downloading copyrighted material.

    Hence, all danish ISPs have to block allofmp3. This in turn caused a Swedish ISP, who acts both in Denmark and Sweden, to block access to the site, even though there is no verdict in sweden. Needless to say, this has caused quite an upstir with people speculating if the ISP is violating swedish law by doing so, or at least breaking the signed agreement of delivering full access to the internet to their customers.

    That’s the end of my ranting.

  8. S.Z.

    December 21st, 2006 at 2:05 am

    If AllofMP3 gets lost on court in US, will it be illegal for Google to search it? So maybe Google will ban AllofMP3?

    Tech Tutorials: http://www.hotcoding.com

  9. Nathan

    December 21st, 2006 at 2:09 am

    Allofmp3.com at least demands users to pay for this content, keeping it a “premium product”.

    In my opinion, YouTube is no less of a copyright infringer than Kazaa/Napster: both are a platform for sharing media, which could be copyrighted by someone else. Both Kazaa and Allofmp3 are (were) non-US entities. Perhaps the US likes to keep copyright infringers in their own back yard.

    It baffles me that people don’t see it as such.

    In the next 5 years, most likely suppliers like YouTube and Dailymotion will be required to screen and label all content before broadcasting, meaning that they will be directly accountable for any copyright infringement.

  10. Stephen

    December 21st, 2006 at 3:19 am

    Nathan says, “In the next 5 years, most likely suppliers like YouTube and Dailymotion will be required to screen and label all content before broadcasting, meaning that they will be directly accountable for any copyright infringement.”

    You meant the DMCA will be completely repealed? That doesn’t seem likely, does it, considering it would decimate the internet. How are ISPs and large portals sites going to be able to monitor everything? Does the phone company listen in to your phone calls to detect music being played?

    The solution is for rightsholders to realize that they can’t monitize every single use of their work (and were never able to in the past either: remember cassettes, 8-tracks? anyway, phonorecords have only been protected under federal law since 1972). Rightsholders need to leverage the exposure that the internet provides to make money.

    The Japanese rightsholders are insane: YouTube has created a U.S. market for their artists and zany TV shows that never existed before, many of which are off-the-air, has-beens, or moribund in their own country. Release that stuff over here in clean, well recorded DVDs and CDs! Cut deals with U.S. record companies and producers to leverage the exposure and create new content they can sell or broadcast.

  11. Smaran

    December 21st, 2006 at 3:29 am

    I wish Google would buy Allofmp3 too, they’re such a great resource for some really rare music that’s unavailable on other online services like iTunes and eMusic. I was looking everywhere for the soundtrack to the movie, The Beach. It is only available online at Allofmp3. It’s not even on any P2P network or BitTorrent site (not that I would download it illegally).

  12. Scott

    December 21st, 2006 at 4:02 am

    To buy music through AllOfMP3, you go through 2 processors: xrost.biz and clickandbuy.com — you fund your AllOfMP3 account via Xrost, and your Xrost account with ClickAndBuy. Not all of the information requested is required.

    Although there were fewer steps to fund with a credit card, once you set up your Xrost & ClickAndBuy accounts (a 5-minute process), it really doesn’t take that much more time to fund with this alternative method (it adds *maybe* another 2 minutes to the process).

    Additionally, there was a nominal fee when using a credit card, but not with this other method, plus you get an additional bonus credit, so think of it as compensation for the extra 2 minutes of work.

    I put my own xenophobic concerns aside, and funded my accounts by using a debit card account I only use for internet purchases, which is only funded with just enough to cover each purchase, just prior to making the purchase.

    I’ve used AllOfMP3 for years, and the alternative funding methods for several months, and never once had a single problem.

    Like others said, once AllOfMP3 is gone, others will take its place, some of which are available right now… Has anyone tried LegalSounds.com or MusicMP3.ru yet?

  13. mike power

    December 21st, 2006 at 5:00 am

    I would be more sympathetic to artists if it wasn’t for the fact that consumers have been ripped off for years and the main beneficiaries are music companies and the well established artists. I could get most of this stuff free via file sharing and millions do just that and this benefits the artist not one jot.

    Quite simply I wouldn’t buy most of what I download from AllOfMP3 if I had to pay full price so my activities are not denying any artist an income. I’m sure that ALLOfMP3 will come to some kind of arrangement eventually otherwise it will be throwing away its solid base.

    Do they have many paying customers? You bet. They turn over millions of dollars a year. And they just happen to have the best music site around. Well designed, easily navigated and good looking. I’ll continue to use them until I’m forced to stop.

  14. Eric Mill

    December 21st, 2006 at 5:39 am

    “…and basically generally rightsholders…”

    basically generally what?? I must know!

  15. Z. D. Smith

    December 21st, 2006 at 6:21 am

    I’m afraid that’s not really what ‘triage’ means. May I suggest ‘barrage’, instead?

  16. Dan

    December 21st, 2006 at 7:06 am

    “All of this is great marketing for AllofMP3, but it’s unclear how long the service will last under this kind of pressure. Whatever happens, though, something else will spring up in its place. At the end of the day, the labels will have to choose between suing a very large percentage of the world’s citizens, or else finally coming up with a digital music model that makes sense (meaning, no DRM).”

    I think you’ve hit the nail on the head there. Too bad it’ll take the RIAA at least a decade before they figure that out.

  17. Nathan

    December 21st, 2006 at 7:37 am

    Stephen, it is not reasonable to demand that artists change their opinion.

    Media consumption is increasing thanks to Tivo, MP3-players and an increase in media creation, and platforms such as YouTube facilitate the free distribution of premium content.

    On the one hand, the Internet can serve to promote new artists, on the other hand, it demotivates producers of professional content, since the life span of a recording is much shorter now.

    Again: YouTube and its shareholders make big bucks off the traffic generated by other people’s content. The DMCA will not survive in its current form.

  18. Sharad

    December 21st, 2006 at 8:06 am

    If internet is like a society (virtual?), eventually there will be a law that will govern its behaviour. No doubt DRM sucks big time and its not gonna last long.

    Why cant the bigwigs join hands and come up with something more meaningful (a win-win situation for everyone - artists, record companies, and general public)

  19. Drew Olanoff

    December 21st, 2006 at 8:18 am

    AllofMp3 from a usability perspective was the best music delivery site for pay that I’ve seen. Hopefully someone who is willing to be fully legit took notice and can replicate it.

  20. Adi

    December 21st, 2006 at 8:33 am

    What about http://www.mp3spy.ru

  21. Jeff B

    December 21st, 2006 at 8:39 am

    re: “Quite simply I wouldn’t buy most of what I download from AllOfMP3 if I had to pay full price so my activities are not denying any artist an income. ”

    Absolulely. Agree 100%

    re: “they just happen to have the best music site around. Well designed, easily navigated and good looking.”

    Again, agree 100%.

    The one point you missed is their FANTASTIC business model: high quality, DRM-free down-loads based on a sliding scale cost p/mb, starting as low as 0.03 cents. Personally I think that US buyers would be more thaning willing to pay 0.05 - 0.08 p/MB, putting the cost of a typical CD around $3.00 - $3.50. - Jeff

  22. John Handelaar

    December 21st, 2006 at 8:40 am

    Someone buy Mike a dictionary and highlight the page with ‘triage’ on it.

  23. ABCota

    December 21st, 2006 at 8:45 am

    @14. I think makers rip consumers off and the actual designers and builders of the cars don’t benefit as much as the car company does. Does that mean I’m justified in stealing cars?

  24. Brian Solis

    December 21st, 2006 at 8:59 am

    It’s just a sign that the record company should focus more attention on creating a better balance between product and price. At $18.99 per CD, it was just a matter of time until Tower Records went out of business. At .99 cents per song, iTunes business is down 65% - some CDs have 17-18 songs on them. Best Buy and Circuit City have it figured out, selling new CDs at $8.99 and $9.99.

  25. MC

    December 21st, 2006 at 10:01 am

    Anybody have any feedback with either GoMusic.ru or Mp3sale.ru? 10 - 15 cents a song is crazy cheap but I’m a bit hesitant in forking over CC and other deets to test the ‘experience’.

  26. idle

    December 21st, 2006 at 1:15 pm

    triage

    noun
    sorting and allocating aid on the basis of need for or likely benefit from medical treatment or food

    citation:
    triage. Dictionary.com. WordNet® 2.1. Princeton University. http://dictionary.reference.com/browse/triage (accessed: December 21, 2006).

  27. Sylvain

    December 21st, 2006 at 1:58 pm

    AllofMP3 is perhaps a good business model for AllofMP3… but only for AllofMP3… and there are only IT guys who can think we can value music only by filesize…

    But I do agree on the no-DRM part…

  28. NLtrooper

    December 21st, 2006 at 2:00 pm

    @ABCota
    Copyright infringement is not theft, so that analogy is wrong. You’re not taking music away when you download a song. You merely copy it.

  29. pwb

    December 21st, 2006 at 2:28 pm

    YouTube strikes me as significantly different from Kazaa/AllofMP3.

    Kazaa/AllofMP3 provide near-perfect, complete copies of things otherwise available for purchase. YouTube provides imperfect, incomplete streams of things that were free in the first place and not otherwise available for sale.

    YouTube has DMCA and possibly even fair use on its side. Not so with Kazaa/AllofMP3.

  30. tom

    December 21st, 2006 at 5:21 pm

    AllofMP3 can only offer their low prices because they pay ONLY for bandwidth and infrastructure - no money at all goes back to any of the people (artists, producers, labels) who helped create the music. It’s a business model that cannot work if they showed any respect towards the artists or labels. And for those of you opposed to the business models of the four or five big music labels making commercially-safe music, at least spare a thought for the four of five THOUSAND small, independent music labels and truly creative artists who are GOING BROKE because of sites like AllofMP3.

  31. Blaze

    December 21st, 2006 at 5:32 pm

    AllofMP3 was almost perfect except for the not-paying-artists part. If they are smart they could change their business model & everyone would be happy. Especially after all the new traffic they should be getting.

  32. Hornswaggled

    December 21st, 2006 at 7:44 pm

    I know many who went from Napster/Kazaa/DirectConnect to AllofMp3 and didnt look back. People are WILLING to pay for music if its in the format and quality they like. 2-3 Bucks per album are good, 5 tops. If we can get it for free then the service needs to be better and more convenient than the other ways.

    When/if this gets shut down there will be more people looking for other free sources, I cant imagine going from a buck an album to being okay with paying 99 cents per track.

  33. Hornswaggled

    December 21st, 2006 at 10:41 pm

    After thinking about it Google would better off purchasing Pandora. That service seems like it would be something Google would appreciate a bit more.

  34. Emre Sokullu

    December 22nd, 2006 at 12:24 am

    How can you support a company that f*ck up the industry! These guys do not follow honest business practices! Would you promote an illegal MP3 search engine site on this site? This has no difference… We should think from the producer perspective also, I’d prefer to pay $0.9 more not to let the artist I listen to die from hunger!!! (well, a bit exaggerated of course)

  35. Marko

    December 22nd, 2006 at 2:08 am

    Hey, what happened to features, not products?

  36. Clancolin

    December 22nd, 2006 at 2:16 pm

    Actually AllofMP3 does pay royalties in Russia, but the RIAA Mafia are so obsessed with closing AOM down that they refuse to take the money! Also, AOM offered to bring their business model to the USA - guess who opposed them?

    As for greed and theft, google this:- “RIAA Petitions For Lower Songwriter Royalties” for reprehensible behavoiur.

    IMHO, the RIAA are doing a splendid job of harrassing individuals and alienating America with millions worldwide (see “RIAA conducting “reign of terror,” lawyer says”). if I were American, I’d be a bit more concerned about those issues, than if tracks should sell at 69 cents because they can’t sell at 79.

    If you *are* American and concerned, there is a “Take a Stand Against the Madness” petition that currently has 97,000 signatures and needs 100,000 to petition Congress.

    Finally, AOM is a great site. It works well and I’d still use it even if they doubled their prices. Artists should get rewarded for their work, but not in perpetuity and not to gratuitous excess. AOM is too cheap, I-Tunes too expensive - there is a solution in there…

  37. David Mackey

    December 23rd, 2006 at 4:17 pm

    The question is - is AllofMP3 legal under Russian law?

  38. Eugene

    December 24th, 2006 at 2:26 am

    2MC:

    Concerning GoMusic.ru - it’s just a mirror of mp3search.ru… One of the oldest russian mp3 sites.

    MP3SALE.ru - is my favourite now.. Absolutely safe CC transactions (thru independent proccessing), great music collection, and now there’s a 100% christmas bonus to $50 payment til January, 15th.

  39. the apostle

    December 25th, 2006 at 9:29 am

    It’s great that the internet has created an environment whereby the artists get completely robbed. Too many people are stealing. Yep, probably 90%, or more, of the people who posted here have or are actively stealing music (and other intellectual property, including software, movies, clip art, digital images, fonts, etc.). If a bunch of Russians broke in to your house and stole all your stuff, many of you would sing a different tune. It’s not any different than stealing property via the Internet (save for people’s whacko perceptions that they are entitled to free music). Theft is theft. Just because you don’t like prices, record companies, distribution deals, DRM, etc doesn’t give YOU or anyone else the right to circumvent the system and start stealing. Deal with reality folks!!!!

  40. the apostle

    December 25th, 2006 at 9:33 am

    Oh yeah, if you’re gonna mention that DRM is bad and should be removed/replaced, provide or suggest an alternative other than freely distributed files - ’cause that ain’t gonna happen.

  41. anti-apostle

    December 27th, 2006 at 2:48 pm

    the apostle - I honestly believe that people with your opinion could only be in the employment of RIAA.

    I have been ripped off to the tune of 10’s of thousands over the past 10 years that I have been buying CDs. New releases in Ireland cost 20euro!!!

    Allofmp3 was a breath of fresh air. I was finaly getting music at a affordable price. Frankly I could’t give a sh!te about the arguments about ‘artists rights’ - the record companies were shafting them long before allofmp3 came along.

    DRM is a joke - plain & simple.

  42. the messiah

    January 1st, 2007 at 2:54 pm

    Apostle - do you really expect the consumers to feel sorry for people like Robbie Williams with his £80M Sony recording contract? Sure, artists should get paid for their creative output but let’s be honest about it - they’re unlikely to miss their “potential” earnings. You could argue that artists/bands who are trying to break out will miss out on revenue also but they will probably get tremendous amount of exposure from sites like AllofMP3 without getting involved with recording studios in the first place. And so the obvious conclusion is that the trans-national corporate recording studios are the only ones threatened by the Russian site and hence are trying their hardest to close it down. Ultimately, forward-thinking artists will become involved with AllofMP3 and cut out the corporate middlemen. I’m sure owners of AllofMP3 will only be too pleased to deal directly with the artists, legitimise their business and challenge iTunes and others. This way music will become cheaper, more easily available and more original (less manufactured pop and boy/girl bands created by advertising and media moguls like Simon Cowell). Google has already shown how a small company with an innovative business model can succesfully compete with an established corporate behemoth like Microsoft. AllofMP3, if not strangled in its infancy, has the potential to revolutionise the way music and video entertainment content is produced and enjoyed. If they won’t then someone else will (if internet remains neutral). This is not a question of “if” but of “when”, in my humble opinion.

  43. Den

    February 19th, 2007 at 3:16 pm

    cmon… cmon…. in europe u have to pay 25 Euros for a CD, 1 Euro it’s for the singer, 3 Euros tax, 1 for shipping, 2 for the store, and the other 18 Euros? recording studios.
    that’s the truth.

    let me pay a cd what’s worth (5-6 Euro / 7-8$ ) u’ll see no one will search alternative pirate methods to download music.

    one hit parade can sell about 2/3.000.000 original cd, and can be grabbed illegally for other 12.000.000 copies.
    if they’r smart enough they can just use the calculator to understand that musics and movies cost too much on the retail store:

    Now: CD 24.99$
    @singer: 3.000.000 * 1.7$ (each copy) = 5.100.000 $
    @singer: 12.000.000 * 0$ (downloaded) = 0 $

    @studios: 3.000.000 * 20$ (each copy) = 60.000.000 $
    @studios: 12.000.000 * 0$ (downloaded) = 0 $

    Hope for the future: Digital Album for 4.4$
    @singer: 15.000.000 * 0.4$ (each copy) = 6.000.000 $
    @studios: 15.000.000 * 4$ (each copy) = 60.000.000 $

    and for sure we’ll buy that album if sold for 5-8$, so they can have a lot of profit, but they won’t.
    bcose they wants to gain more money, they won’t stop, for them it’s not enough.
    they wants gain 60.000.000$ (like now) from the selling of the retail store, plus then other 100.000.000$ from digital copyrighted copy, that’s the truth.
    they wants more, always more.

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