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Who is benefiting from the Mega shutdown? And were Mega’s D2F plans behind the major labels’ attack?

By | Published on Friday 27 January 2012


While the Recording Industry Association Of America expressed optimism earlier this week that last week’s shut down of MegaUpload might lead to a surge in public interest in licenced digital music platforms, especially those in the rapidly expanding streaming music space, Torrentfreak says that the biggest beneficiaries of the Mega attack have been the firm’s direct competitors, ie other file-transfer services which offer access to large quantities of unlicensed content.

Filefactory, Depositfiles,, Hotfile and Rapidshare – the latter of which has been regularly accused by European rights owners of enabling copyright infringement, more so than the Mega sites in fact – have all reportedly welcomed large numbers of new users this week, in some cases hundreds of thousands.

A portion of those will be people who used MegaUpload for the legitimate distribution of their own content, though the music and movie industries will no doubt suspect that a larger portion are on the look out for more free but illegal downloads of songs, films and TV shows.

As previously reported, many of those Mega competitors with key operations in the US have altered their services so to reduce the possibility of them enabling copyright infringement, presumably amidst fears they too could be targeted with criminal copyright actions.

Though many of those file-transfer sites based outside the US have simply blocked American IP addresses, in a bid to ensure they are operating beyond the jurisdiction of the American courts. Others are just watching the situation closely, but haven’t actually changed anything about the way they operate, and are instead enjoying all the new traffic the closure of the Mega sites has delivered them.

To be fair to the RIAA’s data man Joshua P Friedlander, he conceded that a portion of Mega’s customer base would seek out other free and illegal content sources but, citing the impact the closure of LimeWire had on legit digital music sales, he said he was also optimistic the dramatic swoop against MegaUpload and MegaVideo would benefit legit services too, especially those which offer a freemium option. Whether said services have seen anywhere near the spike Torrentfreak claims the other file-transfer platforms have enjoyed, though, remains to be seen.

Elsewhere in Mega news, some supporters of the now shuttered file-sharing company are accusing the big record companies of making MegaUpload and its boss Kim Schmitz enemy number one because the Mega firm was planning on launching a direct-to-fan platform for artists to be called Megabox.

The conspiracy theory goes that the big record companies especially feared Schmitz’s next business venture because it would enable artists to sell their own music and earn a 90% share of any sales. There were even plans to enable artists to earn from music giveaways, presumably via some sort of ad-funded platform. The labels knew this would empower artists and cut them out of the equation – the conspiracy theory goes – hence why they worked so hard to run the entire Mega company out of business.

Of course it is true that big content firms, once they have labelled an outfit as being an ‘uber-pirate’, generally aim to force that company out of business entirely, even if said company is concurrently developing legitimate content platforms alongside any service which enables piracy. Even though it’s not totally unprecedented for rights owners to sometimes forgive past piracy when licensing those digital start-ups that have somehow avoided the uber-pirate tag. But I don’t think America’s big content owners – who have been quietly fuming about the Mega business for sometime – needed the threat of Schmitz launching a legit direct-to-fan platform before putting active pressure on the authorities to act.

And, of course, that’s to assume a Mega D2F platform would be a huge threat to the labels. After all, numerous direct-to-fan platforms already exist, and some are gaining real traction amongst new artists and veteran acts out of record contracts, so Schmitz moving into this space wouldn’t really change anything. True, Mega could promote its D2F offering to its large existing user-base, but then that’s what Google Music is planning to do with its recently launched D2F system in the US, and that project is backed by most of the majors and big indie labels.

Record companies and movie studios just don’t like seeing individuals get rich on piracy-based businesses, and while it may be childish to let copyright enforcement get personal, when said individuals flaunt their piracy-enabled riches, that’s always going to rally label and studio chiefs to pursue whatever route is available to put that person out of business. Those individuals talking loudly about plans to launch label or artist friendly legit services may be part of that flaunting, but any threat those supposed plans pose is unlikely, in itself, to greatly impact on the fighting spirit in copyright land one way or the other.