well, Sonific is closing its doors. And I have to say, I’m not suprised. There are a large number of startups doing the user upload thing to try to avoid the copyright infringement issue, but the record labels are starting to take a more aggressive stance against them and against linking companies like Seeqpod.
The copyright law, for all it’s flaws and problems is nothing if not clear: knowingly making a copy of a copyrighted work for commercial purposes is punishable by up to $150k in fines per infringement. Now, some companies are trying to get out of that by taking the view that their users uploaded it, they just provide the platform. But that doesn’t really work.
Meaning, without the platform in place, the infringement couldn’t happen. So, unless you place safeguards against infringement, you are providing the means to do it. Some will disagree with me, but look at it from an investor risk assessment:
- I can assume the risk and hope I don’t get sued
- I can assume the risk and hope someone with deep pockets buys me
- I can assume the risk and hope that the system changes
Since most of these are very unlikely to begin with – the second most likely – but not really, an investor is not likely to pursue investment with such a company.
Thus – when services like this start to run out of money – which they will – more will go belly up.
In our view, while the copyright law does not make much sense for our new music order out there on the internet, it’s far better to play ball with the copyright holders then it is to see them in court.