| Universal Music challenges the legality of Deezer, a free streaming website |
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| Copyright | ||||
| Written by Nicolas Jondet | ||||
| Saturday, 15 September 2007 20:53 | ||||
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[UPDATE October 10: Sony BMG, the second largest music company in the world, has signed a deal with Deezer to authorize the broadcasting of 165,000 songs from its music catalogue see story in French-law.net] Deezer: a free music streaming service Deezer.com is a website that lets users have unlimited and free access to music in streaming. As such, it represents an unusual combination of features belonging to other, more established, models of digital content distribution such as online shops and web radios. Deezer is different from services such as the iTunes Store or its French counterparts VirginMega and Fnac Music since it makes music available in streaming only. By contrast with online shops, music on Deezer cannot be downloaded on computers or MP3 players, in theory at least. Predictably, hackers quickly found a simple way to circumvent these restrictions (by adding a piece of software to their Firefox internet browser, users have been able to download the music that was being streamed). Deezer pledged to fix this flaw and actually switched off its website on August 31 in order to upgrade its system. Whether this will be enough to secure the content seems unlikely, given the ease with which hackers find and exploit weaknesses in any digital locks. As a provider of free music in streaming, Deezer shares characteristics with the web radio format. However, Deezer provides its users with a far greater level of customization and freedom in music selection. Users who choose to register with Deezer can create, save and listen to playlists of their favorite songs, thus in effect becoming their own DJs. Users of web radios do not have direct control over the music that is being played. Deezer could thus be described as an on-demand web radio. Yet, beyond these technical and functional specificities, the main difference between Deezer and the other services lies in the fact that Deezer’s compliance with copyright law has been under scrutiny since its inception. The unauthorized collecting and making available of music Currently, the manner in which Deezer gathers and makes music available leaves it exposed to accusations of copyright infringement. Deezer builds its music catalogue by relying on its registered users to upload their MP3 files on its servers (see picture).  Deezer's user interface Since Deezer’s catalogue is being built by its users, it lacks the depth, range and consistency in sound quality of more established services. Admittedly, these are minor issues which can be resolved through time by the constant addition of songs and files of better quality. However, the threat of copyright litigation is a Sword of Damocles. Deezer launched its platform and started collecting and broadcasting music without any authorization from copyright holders, thus making it liable for copyright infringement. The service also puts its active users at risk of prosecution. Under French law, any act of uploading is classified as copyright infringement and is punishable by a maximum three year jail sentence and a €300,000 fine. Although the French courts have never used the full force of the law in illegal file-sharing cases, and although such judicial moderation has been sanctioned by the previous government (see story in French-law.net), uploaders, especially prolific ones, can still face prosecution.* The fact that Deezer has been gathering and broadcasting music without the authorization of copyright holders would always be contentious. The fact that Deezer has made a commercial enterprise out of it could only make it worse in the eyes of rightholders. The commercial nature of the service  Deezer's Player with iTunes icon Anyhow, though it is unclear exactly how and more importantly how much money Deezer makes, the mere fact that it the service has a commercial nature seems to have been the main bone of contention with organizations representing the music industry. Deezer's previous incarnation shut down in March In March 2007, Deezer, then known as Blogmusik.net, was closed down by societies representing artists and producers. The effort was spearheaded by the SACEM (see English website), the French collecting society which represents music authors and composers.** The society, whose role is to collect payments of copyright royalties and redistribute them to the authors, composers and publishers, had the service shut down for failure to pay these royalties. The societies notified the host of Blogmusik.net of the website’s illegal activities and required the host to remove the infringing content. Once Blogmusik.net had been shut down, it appeared that the traditional scenario in such cases would then unfold. The collecting societies would find another target in their endless fight against piracy and the castigated website would eventually resurface under another name, in another form, somewhere on the web. Unexpectedly however, both parties entered negotiations to find an agreement on royalty payments. Reaching such an agreement would allow the website to operate as a legitimate business. It would also give the SACEM an opportunity to explore new ways of generating revenue streams for its members. Deezer's rebirth thanks to a royalty payment deal with a collecting society After several months of negotiations, the SACEM reached, on August 22, what it qualified as an “experimental agreement” with Deezer. Although the financial details of the deal have not been disclosed, it is understood that it involves Deezer sharing part of their advertising revenues with the SACEM. The society has also set a minimum payment for each performance of a song, irrespective of the advertising revenues it generates. Deezer will now have to give the SACEM access to the lists of songs played to enable the society to redistribute royalties to its members in accordance with their popularity on the website. The agreement also requires Deezer to fix any flaw that could allow users to download the music that is being streamed. This experimental agreement is valid until 31 December 2007 and Le Figaro reported that it has retroactive effect, meaning that Deezer will have to pay back the royalties overdue by Blogmusik.net. Lastly, and most importantly, the agreement with the SACEM was envisaged only as the first step towards full legitimacy for Deezer. Under the agreement, Deezer still had to secure individual deals with each and every record label to get their authorization to broadcast their music. In essence, the SACEM let Deezer operates under the condition that the negotiations that were underway with labels would materialize in deals before the end of the year. Deezer’s ongoing negotiations with record labels and its (premature?) claim to legality Both parties were enthusiastic about the agreement. Thierry Desurmont, the vice-president of the board of the SACEM declared that “any new legal way to distribute music online is a good thing” and praised the start-up’s decision “to develop its service within the law”. (01net.) .jpg "Image") Mr. Benassaya Deezer was so confident that the labels would follow suit with the SACEM that the press release announcing its reopening claimed that Deezer was “the first free and legal music on demand website” in the world. However, before any deal could be reached, the largest music company in the world was on the war path. The claim of legality challenged by Universal On August 24, Universal Music issued a press release stating that it had not authorized Deezer to use its catalogue and qualified this exploitation as “illegal”. Universal Music then required the withdrawal of all its songs from the service, reserving the possibility to “seek any remedy… against the publisher of the website and the companies that promote it.” Universal thus directly targeted Deezer whom they claimed they never have been in contact with. This was adamantly denied by Deezer who claims that negotiations with the label had started as early as March (Le Figaro) and that both parties were about to reach an agreement (Neteco.com). Benassaya even went as far as saying that he felt “stabbed in the back” by Universal's statement (01net.). Universal not only targets Deezer but also “the companies that promote it.” This is a veiled threat against Free, a French internet-service provider (ISP). This threat needs to be explained in the larger context of increased rivalry between ISPs over access to exclusive media content. The context of increased competition between ISPs On August 23, Deezer had announced a partnership with Free. The partnership was quite limited, with Free only displaying a link to Deezer on its homepage. Such linking is very valuable to Deezer, though. As an ad-based business model, Deezer can capitalize on the traffic originating from Free’s homepage, which generates 2.8 million hits a month according to Nielsen, a ratings agency (Le Figaro). Neteco.com also speculated that a new version of Deezer scheduled for the end of September could feature new functions, some of which would only be accessible to the customers of the ISP.  Universal Music's venture with Neuf In this context, Deezer with its free home-made music catalogue and partnership with a competitor of Neuf was seen as a threat to both Universal and Neuf Music. When contacted by Neteco.com, Benassaya actually recognized that the announcement of the partnership with Free might have caused Universal’s reaction. And though he argues that the Deezer-Free deal “is only a partnership” and that Deezer does not directly compete with Neuf Music, the former being an on demand radio whereas the latter offers downloads, Universal seems to disagree and to be decided not to let Deezer prosper. Footnotes *The author must disclose that in order to test Deezer’s service, he has broken the law (and any hope of musical credibility) by uploading the title “Le Youki” by French 80s pop sensation Richard Gotainer. **The SACEM was joined by the SDRM, the collecting arm of the SACEM, the Sesam, which administers rights for multimedia content, and the SPPF, which represents independent producers.
SOURCES In English In French - Karine Solovieff, La musique gratuite de Deezer devient légale. 01net., 22 août 2007. - Les auteurs et les producteurs font fermer le site Blogmusik. ZDNet France, 7 mars 2007. Illustration (Photo of Jonathan Benassaya): FROM Jérôme Bouteiller, Jonathan Benassaya (Deezer.com): "Je ne crois pas au principe de la musique payante". Neteco.com, 23 Août 2007.
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Universal Music has denounced as illegal the use by Deezer, a free on-demand streaming website, of songs from its music catalogue and has asked for their removal from the website. Although Deezer had recently been launched after reaching a deal on royalty payments with a French collecting society representing music artists, it was still negotiating individual deals with record labels to obtain their authorization to broadcast their music. Universal is the first label to declare its intention not to collaborate with Deezer. This decision can be explained in two ways. First, Universal wants to reassert its copyrights on its music catalogue. Secondly, it wants to protect a new music venture launched with Neuf, a French internet service provider (ISP) which also belongs to the Vivendi media conglomerate, and under which the customers of the ISP are given free access to Universal’s music.