To say the music business is a bit volatile would be a gross understatement — at least looking at this past week. Just one week ago, I posted a comparison of 38 of the best sites for listening to music on the cheap. Since then, one company has been bought, another has been sued, and another that we haven’t previously written on has become embroiled in controversy.




Tuesday,, a Y Combinator funded company that received angel investment — but no Venture Capital — was bought by Imeem, a social network media site., oft billed as “iTunes for the Web,” will continue its services, free of charge as a stand-alone service. The deal should give the company access to Imeem’s massive content library as well as its licensing deals with major record labels. While the purchase amount wasn’t disclosed, it’s believed to be in the low millions.

Another company wasn’t so fortunate. Seeqpod, whose technology I labeled “questionable” in its legality, was stamped “illegal” this past Friday in a lawsuit brought forward by Warner Music. Seeqpod, a music search engine whose algorithms were derived from the U.S. department of Energy, is being accused of a practice known as “deep linking,” which is when a website or search engine links within another website that is potentially hosting illegal or copyrighted content.

Honestly, Seeqpod’s music search does little more than Google’s image search except for on key dinstinction: Seeqpod not only searches, but allows users to add music directly to a playlist on its website. On Seeqpod’s website, the company claims it is protected under the Digital Millennium Copyright Act because it doesn’t host any material and only operates as a search engine. While the argument may seem to make sense, we’ve witnessed with TV-links and other sites that engage in deep linking that the law is often interpreted in favor of the copyright holders.

In the lawsuit, Warner claims that Seeqpod allows searches for music that is “overwhelmingly copyrighted … Seeqpod will play the work without authorization and will embed the link on social networking sites …” An interesting note is that, last May, Warner Music Group sued Imeem, but the two sides were able to come to an agreement and are now in partnership.

Qtrax made headlines for its “100% free and legal unlimited downloads” — boasting 25 million songs available in its library — but now an Australian news report states that the labels aren’t yet in concert with the web site.

Qtrax, a Peer-to-Peer music downloading service, announced yesterday at the music industry’s largest event (MIDEM in Cannes) that its service will be endorsed by the big four: EMI, Sony BMG, Universal Music, and of course — Warner Music. The Australian report says that Qtrax spent an estimated $1.1 million (U.S.) on the Cannes announcement.

The files will be locked by Microsoft’s Windows Media DRM (Digital Rights Management) software, which means the songs would be downloadable to a compatible music player. According to Wired, Qtrax would not only pay a majority of the revenue to labels and publishers, but would be required to pay a fee per-download and per-play.

But apparently Warner, Sony, and EMI have all released statements that they are not in discussions with Qtrax, reports.

Qtrax’s desktop application was available for download as of 12 pm PST, but I haven’t had a chance to try out the service yet. Qtrax is a branded application of Mozilla’s Songbird music player, an iTunes look-a-like that combines a juke box with web-based search capabilities.

This seems to be the music industry’s new business model: let technologically-proficient innovators create the platform for music distribution, sue the company (a la YouTube, Imeem, and a host of others), and then partner with the same company for millions of dollars in revenue and sometimes a stake in the company.

David Adewumi, a contributing writer with VentureBeat, is the founder & CEO of a social storytelling platform billed “The Wikipedia of Stories.”

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