Universal Music Group Sues MySpace over Video Transcoding Service
Universal Music Group has sued Myspace for providing a transcoding service. Myspace users upload videos to their MySpace account and Myspace transcodes them into formats playable by its users. Alleging that MySpace "encourages, facilitates and participates in the unauthorized reproduction, adaptation, distribution and public performance,", UMG is seeking an injunction and unspecified damages, including up to $150,000 for each unauthorized music video or song posted on the Web site. Until last week the two were in licensing discussions. To paraphrase Clausewitz, lawsuits such as this are just business negotiations by another means.
Dale's Comment: This is an interesting claim. It may very well turn on the facts. As I understand them, MySpace is agnostic as to what the content is. It has taken some steps to limit infringing uploads. In this case its servers accept user video uploads, examine the format, if not a supported format they then transcodes it into a playable format. This seems to be similar to what YouTube and other video hosting sites do. But YouTube signed a licensing agreement with Universal (and others) after being threatened with a lawsuit. If Myspace fights this, it will likely argue that it is an ISP, and all they are providing is a tool that can be used by their users for legitimate or illegitimate purposes. Assuming that MySpace is otherwise responding to Universal's DMCA take-down notices, this transcoding service may very well fall within the DMCA's safe harbour.