The Rupert Murdoch-owned social networking site has announced it will use technology from privately-held Gracenote to protect digital rights (copyright) by reviewing songs that members upload to the site. Acccording to the LA Times:
The technology compares [songs uploaded] with Gracenote’s database of
copyrighted material and can block uploads without proper rights. Terms
of the licensing agreement were not disclosed.
The penalty? Cancel the member acccount.
The music business is an example of market failure — it’s a highly concentrated oligopoly:
EMI Group, Vivendi’s Universal Music Group, Warner Music Group and Sony
BMG Music Entertainment own about 75% of mainstream popular music.
And it is acting like every concentrated industry that came before it … when faced with a disrupting technology. Remember that Murdoch’s main business is also under pressure from new technologies.
In case anyone was wondering how Murdoch planned to make money with MySpace, the Times also reports that MySpace "will soon begin selling
songs from nearly 3 million unsigned bands. It
aims to eventually offer copyright-protected songs from major record
One oligopolistic structure rewards another … and the payback is … an iTunes clone!
Pete Cashmore suggests Murdoch rethink his strategy — given the competition and YouTube’s (Google) offer to share $ with copyright holders if they allow the site to retain copyrighted content.