Record labels, in their continuing fight against music pirating, have taken aim at an audio-ripping website that undercuts the legal purchase of music. Several major music labels, including Universal, Capitol, Warner Bros, and Sony, have filed a lawsuit against the website (“YTMP3”) alleging that the site is responsible for direct, contributory, and vicarious copyright infringement. In addition to depriving them of the “fruits of their labor,” the record labels allege that YTMP3 circumvents the technological measures that YouTube has in place to control access to works with copyright protection. At this time, YouTube nor Google–YouTube’s owner–are listed as defendants in the lawsuit.

YTMP3, allegedly operated by a German citizen named Philip Matesanz and his company PMD Technologie UG, removes the audio from YouTube videos and allows third-party users to download that audio onto their personal computer. The YTMP3 homepage states that: “ is the easiest online service for converting videos to mp3. You do not need an account, the only thing you need is a YouTube URL. We will start to convert the audiotrack of your videofile to mp3 as soon as you have submitted it and you will be able to download it.” Any person with access to the Internet could use YTMP3 to rip and download copyrighted music from YouTube. Some reports suggest that YTMP3 is responsible for around 40 percent of all music that is stream ripped from YouTube videos.

This lawsuit comes on the heels of the emergence of paid streaming services as a means to fuel an industry that has seen very little growth in recent years. After many years of economic stagnation, the implementation of the paid music-streaming model has the music industry on pace to achieve its highest level of revenue since the mid-2000s. Despite recent success in attracting paid subscribers, downloading music from online stream-ripping websites significantly undercuts the music marketplace by giving potential customers an illegal but free alternative to purchasing music or music streaming services. A copyright lawsuit against a foreign website—after numerous people have already downloaded music and when damages are uncertain—does not seem to be an effective remedy, especially considering the difficulty of collecting any damages won from a foreign entity.

It is clear that there is a large demand for music that is not being met by the current marketplace, as only about 1% of the world’s population is currently paying for music streaming services. Although streaming subscriptions have been relatively successful, a year-long streaming subscription costs more than most individuals spent on music during the peak period of music sales in the mid-1990s. The major record labels would be wise to continue to develop innovative mediums and create business partnerships that would allow customers to enjoy music at lower prices. It is unrealistic to assume that the music industry can completely eliminate the copyright infringement made possible by the Internet, but developing creative business models that keep up with technological changes could convince more customers to join the legal marketplace. The outcome of this lawsuit may play a large role in determining whether record labels will rely on copyright lawsuits ex post or seek to further innovate their business models in order to undercut the practices that are undercutting them.

–Donovan Sowder


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