Why MegaUpload was really shut down...

I read many of you have an opinion about this business model and that it would not work.

To be clear, if they were planing to invest millions in this, than your argument is invalid.
This must be a carefully tested and analyzed business model that requires high level of
management to sustain, but it can definitely bring huge profit to the owner of the corp.
We are talking about a guy that knew how to bullshit his way to the millionaires club but
in the same time was clever enough to invest properly and earn a quite solid amount of
money. He was not clever enough to predict the future events and protect himself from
the copyright protection organisations but I believe he'll come out of the whole soon and
with the knowledge he now owns, will make another small online revolution with a good
business model. And if this is the real reason why Megaupload was shut down, than you
can be quite sure that the music industry had a reason to fear and take actions against.

gb5000 said:

But you guys have a tendency to view things from a very limited perspective on certain issues (I'm guilty of this as well, we all are) without actually looking at the bigger picture of things, nor do you take the time to actually research what this industry is about before you think that a "revolution" will benefit all parties involved.

IF Music Companies sell those rights in the first place.

Also, do you know how much the beatles catalog is worth? (look it up, MJ bought it).

Do you know how much EMI sold its publishing arm to another major distributor for?

Yeah, good luck finding enough music which has the demand large enough to drive traffic in large enough quantities in order for the service Kim provides to be able to sustain itself.


Hmm, do you mean like radio, youtube (who pays the record company and percentage of the money earned by there partner program, for those who didn't know),

ALL DON'T OWN COMPLETE RIGHTS TO THE CONTENT OTHER THEN TO SELL.

Some independent artist do this. But not very many has the demand to sustain the traffic needed to make megaupload stay within reach or million dollar revenue streams.

The artist music he wants to sell, the one's who will bring traffic to his site in droves, more then likely, if there is a huge demand, do not own rights to their material. So he will have a hard time getting those rights without, once again, GETTING IN BED WITH THE RECORD COMPANIES YOU GUYS LOVE TO HATE!!

If they are signed to a Major Media (Record/TV) company, NO!

They will get sued, and so will the person allowing the sale and taking whatever percentage they negotiated without the record companies consent.

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I think it is very clear that you don't understand the concept of MegaBox.

I think it is also very clear that, as we all previously pointed out, you don't know Kim.

You need re-read what all of us wrote, then re-read the article, then think logically for a minute.

meatro said:

Yeah, dude.. You're kind of being a tool, gb5000. People here aren't (all) stupid.

Allow me to chuck a stick in your spokes... Your entire lecture here is based on the assumption, I'm assuming it's an assumption based on the knowledge that you most likely don't know the owner of Mega, Kim Dotcom.

That assumption is that MegaBox planned to ONLY pay the artist directly. I'm assuming this assumption is based on previous statements in this thread, which you took to heart and decided we needed further learning on.

Now, let's ASSUME even more.. What if, and this is a big one, MegaBox decided that instead of paying the artist directly....... They wanted to, you ready for this? Hold onto your butts, PAY one of those larger organizations on BEHALF of the artist? Therefore, placing the responsibility of payment exactly where it belongs.

Unless it's a small independent artist, who manages their own material. (I know I'm no record exec, but I've seen this field on music sites that I signed up for... Are you the manager... Or are you the artist?)

Oh man, you see what I did there? You had this sound logic going against everybody here and there was a very easy solution to the problem you presented. (That everybody here except for you is partially retarded.)

Lesson #1 regarding this wacky theory of mine.. Not only are artists busy doing stuff besides collecting and paying people... A lot of them probably are not suited (smart enough) to be handling money and dishing it out. Which means that most other places that collects money on behalf of the artist, most likely does not give it straight to the artist.

When you buy a CD at Wal-Mart, the artist is not there ringing up your order. Are they? But why not? The money HAS to go directly to the artist, right?? I can't give it to Sally, does she even fucking KNOW T-Pain?? How can she give him his money if she doesn't know him.

Because, the cliffnotes of this lesson is this:
$$Money$$ -> Consumer -> Store -> Mystical Money Company -> Artist.
So why could Mega not do this?
$$Money$$ -> Consumer -> Mega -> Mystical Money Company -> Artist.

............That seems pretty easy. And something that a multi-millionaire planning on starting a music sharing site would be able to figure out (or pay somebody to figure out for him.)

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I don't mind being "perceived" as a tool, and I'll take the risk of being "unpopular" in order to (hopefully) give you guys some perspective on things.

The statements you said above in red is what I want to address

Quotes from what I wrote eariler:

Megaupload, with all due respect, cannot just decide to "skip" these organizations which represent more then 98% of ALL PROFESSIONAL songwriters and producers as well as the artist themselves.

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But they can do that only because the record companies (begrudengtly I might add) consented to them doing so

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.

So no, it CAN'T sustain itself. Atleast not legally. It would have to continue operating in a underground manner, like its been doing.

Or get in bed with record companies...........

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So basically, your proving my point, with a counter argument which states EXACTLY what I said in different words earlier.

In order for this to work, Kim would HAVE TO....

HAVE TO...

Get in bed with record companies.

Otherwise....

Not gonna work.

He would have to stay underground, which is how Megaupload started.

And to answer you question, I've been doing music since a I was a weeeeee litttle tot, and have done some thing in the industry as a producer and writer that I will keep to myself for now.

spasovski said:

He was not clever enough to predict the future events and protect himself from the copyright protection organisations but I believe he'll come out of the whole soon and with the knowledge he now owns, will make another small online revolution with a good business model. And if this is the real reason why Megaupload was shut down, than you can be quite sure that the music industry had a reason to fear and take actions against.

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I actually believe Kim did see this trouble coming for him, and he was going to phase out Megaupload over the next 2-3 years, and phase in legitimate businesses like MegaBox was going to be.

I can't really see any other reason for him even taking time away from his video games to help develop MegaBox, except for the fact that he wanted more legitimate income and to boost his moral character to purchase his home in New Zealand and stop having to look over his shoulder every time he wants to leave his house.

You guys are not taking into consideration of one HUGE point.

Kim Dotcom has been convicted of using and selling stolen calling card numbers.
Also, Schmitz was sentenced to a probationary sentence of two years for computer fraud and handling stolen goods.

and

Schmitz purchased $375,000 worth of shares of the nearly bankrupt company LetsBuyIt.com and subsequently announced his intention to invest €50 million in the company http://en.wikipedia.org/wiki/Kim_Dotcom#cite_note-spiegel-19Unknown to others, Schmitz did not have the funds available to invest, although the announcement caused the share value of LetsBuyIt.com to jump by nearly 300% http://en.wikipedia.org/wiki/Kim_Dotcom#cite_note-20Schmitz quickly sold the shares and profited $1.5 million as a result

and

In January 2002, Schmitz was arrested in Bangkok, Thailand, deported to Germany, and sentenced to a probationary sentence of one year and eight months, and a €100,000 fine, the largest insider-trading case in Germany at the time. Schmitz also pleaded guilty to embezzlement in November 2003 and received a two-year probation sentence.

So with all this it is clear..... Schmitz is a crook and has always been a crook.


Now, using all your common sense, street smarts and BHW sharpness...

What do you think the biggest pirate/embezzler was going to do with the money generated from these artist work ???

Give them 90%??....GTFO.

Virus1 said:

So with all this it is clear..... Schmitz is a crook and has always been a crook.

Now, using all your common sense, street smarts and BHW sharpness...

What do you think the biggest pirate/embezzler was going to do with the money generated from these artist work ???

Give them 90%??....GTFO.

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A lot of crooks get tired of running and want to go legit, and so they take their ill gotten money, and turn it into legitimate revenue streams, and start over as a productive member of society. Many of us on Blackhatworld do the same thing. We start off doing the dirty to make a decent bankroll, which we then use to go legit.

He simply wouldn't be able to just rob 90% of funds without paying the artists, because the revenue would be too transparent to get away with it. MegaBox would probably only generate a few million in revenue the first year anyways, it wouldn't be worth it for Kim to somehow try to steal it all from the artists.

That is like saying that Kim would never display peoples ads that the paid for, or wouldn't pay out affiliates because he has done things wrong previously. Kim does what makes him the most money. Paying 90% to the artists and keeping 10% and his other methods of income would most likely generate him more money then simply stealing from a few artists and getting away with a few million and ruining his reputation. Just doesn't make logical sense to think he wouldn't pay out the 90%.

gb5000 said:

Well, I guess thats your opinion.

But that "rehashed garbage" is loved by millions, feeds thousands of people who work in the industry, and helps fund OTHER talented people who would otherwise go unknown had it not been for the industry (and I'm talking BIG SHIT, BIG FAME, not no "viral fame" you guys are probely thinking about in the back of your heads! Not that viral is a bad thing, but its very "flash in the pan" and needs something else behind it to take it to the next level.)

So your opinion on what the industry is putting out (and it promotes more then just pop guys, FYI) is just that, YOUR OPINON. And as long as people have opinions different from yours, it will live on even past your distaste of it.

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Well, with due respect, I could care less who it feeds. Drug cartels feed a lot of ppl too. What about organized crime? Doesn't it feed loving fathers too?

The state of major music is pathetic, to say the least. Treating the entertainment as a business is totally fine, as long as you retain the main asset of it: TALENT. It shouldn't be the other way around where the only thing the business cares for is gauging how many pigs it can reach to sell its garbage... And yes, it's mainly garbage what today comes out of major labels. It CAN obviously take this sheer consumerist path, this doesn't imply it SHOULD be or it's ethical or the best long-term plan.

The idea of music biz as a viable mentoring industry to discover, foster, distribute and -of course- make money on TALENT has gone almost completely lost in these last few decades and I've been an insider for years so no need to explain me how it all works

The only reason why major labels are still (kinda) alive is because of their FAT lobbying in DC. It's one of the only businesses that didn't evolve according to the technology innovation and you know why? You guessed it, lobbying money. It'll eventually come to an end since this artificial state of things (*cough* bribery *cough*) is eventually going to be replaced sooner or later.

In the meanwhile get a taste of the latest auto-tune pop megastar that can't sing or write a song and whose only talent is having a huge marketing business paying ghost songwriters... While millions are basically only offered this shit, I'll shop around for indie talent. It'd be unfair NOT to point out that most ppl don't have the knowledge or means to know *THERE IS* an alternative to this garbage they're constantly pushed.

This doesn't mean megaupload is necessarily the answer or a viable answer because there's still costs and wages that need to be paid even if production companies were to refocus on talent and quality, but that's certainly the main asset that went lost during the years for the sake of making numbers and if a company that makes its profit on alleged talent isn't able to deliver why should I continue supporting their business for their bogus goods?

If someone, especially if he's directly involved with the sad state of affairs of major productions, doesn't understand there's something REALLY WRONG and suicidal with where we at right now, I dunno what else to say.

Best regards


P.S. This is a very interesting article I stumbled across a few days ago: http://techcrunch.com/2012/01/23/silicon-valley-hollywood/

P.S. This is a very interesting article I stumbled across a few days ago: http://techcrunch.com/2012/01/23/sil...ley-hollywood

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The fact that your quoting techcrunch (who has a vested interest in speaking and representing tech companies) tells me all I need to know as to why you wrote what you wrote above. So having an objective discussion with you is probely not gonna happen....

Anyway...Sounds like you have a "vendetta", but before I even go there.....

and I've been an insider for years so no need to explain me how it all works

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tell me....

What do you do in the entertainment industry?

I'll answer your question (and respond to your post) once you do.

Its nice to have a fellow "insider" to talk with. So tell me.....

WHAT DO YOU DO?

What ever he has done previously has no legal bearing on this specific case - other than to add more fuel to the badly written propaganda that's being spun by the media who are largely dominated by the people who want him taken down.

I'm loving that this is opening a much larger debate though, and that attention at least online is being given to some outlandish spin being used by his prosecutors.

I predict a big backfire on this.

gb5000 said:

What do you do in the entertainment industry?

I'll answer your question (and respond to your post) once you do.

Its nice to have a fellow "insider" to talk with. So tell me.....

WHAT DO YOU DO?

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Why does it matter what he does? You haven't told us what you do either. For all we know you're a nobody.

The man made some valid and really interesting points, and instead of making counter-arguments you're resorting to ad hominem attacks.

You haven't told us what you do either. For all we know you're a nobody

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.

Did you read the thread all the way through before you made that accusation:

Quote from an earlier post inside this thread made by GB5000:

And to answer you question, I've been doing music since a I was a weeeeee litttle tot, and have done some thing in the industry as a producer and writer that I will keep to myself for now.

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His Turn......




Back to you....

The man made some valid and really interesting points, and instead of making counter-arguments you're resorting to ad hominem attacks

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Where did I attack him? I simply asked him what he does, its a question any "fellow" insider would ask, esp. if that insider is in my own career field. I would and have done the same sitting in startbucks and running into another IM'er or producer.

Like I said, thats the reason why I did not respond to his post in the first place.

I wanted to see where his experience lie FIRST before I respond to his post.

gb5000 said:

The fact that your quoting techcrunch (who has a vested interest in speaking and representing tech companies) tells me all I need to know as to why you wrote what you wrote above. So having an objective discussion with you is probely not gonna happen....

Anyway...Sounds like you have a "vendetta", but before I even go there.....

tell me....

What do you do in the entertainment industry?

I'll answer your question (and respond to your post) once you do.

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Nah, too old and wise to get into this sort of conversation, bro. Last thing I need to do with my time is a flame on a forum. I don't need to have an interest to suggest an article I find interesting or blindly side as a sports fan with one "faction", as I don't need to be burned out to see where this whole "1990" mentality is taking the industry. Hard to believe not everybody on this board is a struggling hustler in their teens. Regards.

Whether gb5000's view that megabox was the trigger for the shutdown is valid or not, the concept of a non-Guild or corporate label run music industry is viable. Other parties will be picking up this alternative business model, working out the promotional bugs and money center problems, and will run with it.

There is no shortage of new or fledging musicians who can't get a label contract who would bite at the chance to make money in this new way, using the web as the distribution system. All it will take are a few mega success stories, and we're off to a new era.

sirgold said:

Nah, too old and wise to get into this sort of conversation, bro. Last thing I need to do with my time is a flame on a forum. I don't need to have an interest to suggest an article I find interesting or blindly side as a sports fan with one "faction", as I don't need to be burned out to see where this whole "1990" mentality is taking the industry. Hard to believe not everybody on this board is a struggling hustler in their teens. Regards.

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Regards back!

Hey man, you called me out, and you also said you were in insider, so the logical question to ask is "what do you do".

But I understand. Good luck to you!

Did anyone bother to read my reply on the previous page? Megabox was not the reason.

Would you guys rather 90% of the profits from your music and only make $100,000/year or 20% and make $1,000,000 a year or more?

Many industries need a revamp, Music industry included. I agree with the opinion, that
talent has become less and less of a success factor during the past decade. For
promotion and marketing can lift less than mediocre artists into "star" status.

History has shown, that capitalism is the most viable model of economy.
Won't work entirely on its own, there needs to be little government to level the
playing field, as market forces are not nearly as efficient, intelligent and fair as we're lead to believe.

But to be able to talk of any sort of market economy in the first place, we need a functioning market.
Meaning at least 50 market-making companies per niche. Not the 3, 5 or 10 we
have nowadays.

Then artists that have the talent, but do not fit in the industry's cookie cutter mould,
have a chance again. I am not talking of marginal Indie labels, but real competition.

Look at what's going on in the banking sector half a dozen Too Big To Fails rule and
set the rules. For the whole country. And when they are bankrupt, they put a gun to
taxpayers' head and say, "If you let us fall, we will bring the whole system down with us..."

The big ones are all after concentrating power and maintaining the status quo.

Remember how the movie industry shivered, when a $10K budget Blair Witch
Project made an amazing box office hit. The system had been bypassed. And they did
not like it one bit. Luckily for them, the movie did not win an Oscar J

The same with MegaBox. If they came up with a model of earning money from the
people who would not pay one cent for music, do you really think some company
would not have come aboard?

Likewise, many companies can offer free email without going bankrupt. And the one quite close
to broke is the heavyweight USPS. We could forbid emails, as USPS employs half a
million people that pay taxes and have families.

The world changes with new technologies. MegaBox could easily be one of them.
Based on the New Zealand experience, MegaBox 2 will probably be set up in
Moscow or Beijing and time will tell, whether it will end up being an Apple or
an Atari. But they should be given a chance to try.

And no, he would not have run with artists' money. He wanted something legitimate.
I am pretty sure Bill Gates would have had a chance to flee with cash in Microsoft's
account after receiving the down payment from IBM. But he had a better vision than
petty crime. And he surely did not have ten million to spend for a weekend binge at
the time. Which Kim Dotcom did/does have.

I'm positive this is the reason. It is also a scare tactic for others I am assuming. The music industry has been on the ropes for awhile, and it's getting in the later rounds. No doubt it will fall, and that will be a very good thing.

I am a second gen musician. I have owned a home project studio close to 20 years now. I have worked along side former staff producers at Motown and been involved in marketing some of my own stuff since 1995. Listen artists dumb enough to continue working with them because waaaaay to many artists mistake themselves for f'n Smurfs who can only do one thing IMO is the only reason Major labels even exist in this day and age. There is nothing they are doing that an artist can not do for them self or outsource and likely do better.

U got to be kidding me to come on a forum like this and say people here dont know about the music industry. On this board you will find some of the best informed marketers around online or offline WHO PROFIT off content everyday. SirGold is even smart enough to keep quiet but seriously I just cant stand the misinformation anymore. As stated 80-95% of the CRAP at major labels is excess and should have been removed from the model long ago infact a lot of it was never there to begin with. They have lost the focus of making music worth buying and nurturing young talent + supporting older talent that can make songs a mature audience ( who has the money ) will purchase. None of them are record companies they are conglomerates from other media that ate real record companies. lets talk numbers here not opinions and I made some real money working with numbers in my day so artists can do more than just play a keyboard contrary to popular belief even among ourselves.

There are 3 major labels now when I started there were 7

Music Sales went down more than 10 consecutive years

97% of the guys signed to a major end up none recouped: This means that the morons at major labels never even make back the money they advance to 97% of the "artist" they sign

The P.R.O.'s you seem to know and love for licensing let more than 80% of the artists matterial slide by unlicensed every year.

Listen revenue sharing is nothing new I am sure Kim could have done that. Who pays for this inefficiency so far? The consumer and the artists. Now that margins are tight and money is drying up fingers are pointed at megaupload etc. Give me a break all that needs to happen is to trim the fat off your business and create a QUALITY product people are willing to purchase at a fair price and they will. No one will be out of any money it will just be redistributed more fairly. I wish someone could start addressing the real issues and get some REAL MARKETERS involved in music again because that is what it needs.

Here are some ideas:
1. Stop PD from taking money to play only major label releases
2. Stop A&R from serving as managers + publishers and just swapping their personal projects with an A&R from another label
3. Stop using autotune in every f'n song. You can not break new artists that sound like the last 10
4. Go find some real writers who can cover diverse topics and styles and or find multi talented ARTISTS and not autotuned models and reality show has beens.

Lord there are a MILLION things they have been doing wrong for the last 30 years at major labels and I don't see how anyone can defend them as a musician or a business man of any sorts. Just the fact that Kim was able to run a site for 7 years before it was taken down speaks volumes to how Pathetic and out of touch they really are at this point.

There could be a good "indie" label that could compete with the major ones,but so many people are paranoid that if they did such a thing,they think the FEDS will break down their door and put fake charges on them.