CNET is reporting that U.S. District Judge Richard Sullivan has denied EMI’s attempt to shut down ReDigi while the case goes to court. ReDigi is a Web site that allows users to sell the digital music on their computers.

Judge Sullivan, however, is allowing the case to continue because he is “fascinated” by the numerous technological and legal issues involved.

John Ossenmacher, ReDigi’s CEO, said that they are grateful for the judge’s decision in their favor. “ReDigi is breaking down the barriers that have kept consumers from enjoying their intrinsic and lawful ownership rights to their digital purchases.”

For those who don’t know what ReDigi does, it scans a user’s hard drive to get a copy of the song the user wants to sell. It will then delete the file from the seller’s hard drive.

ReDigi claims that the “First Sale” doctrine applies to their business, just as it does to any physical goods.

The company claims that they discourage the illegal copying of music with a verification system, but they can’t guarantee that users back up their music before they sell it.

EMI claims that ReDigi violates copyright law to run their business. The process of making copies of the file off of a user’s hard drive constitutes as an unauthorized copy in their eyes. They say that they have no “First Sale” rights because they sell songs that have been illegally obtained.

EMI was displeased with the courts not issuing the injunction, but they are confident they will win the case.

This case has the potential to set a powerful precedent. If the judge rules in favor of ReDigi, expect numerous businesses to pop up that allow people to sell digital items including movies and games.

Willie Kavanagh, head of EMI in Ireland, said yesterday that the government had ignored a request from EMI to produce the law it was preparing, and that he suspected that the measure would not “satisfy the music industry’s requirement for injunctive relief.”

EMI filed the suit with Ireland’s High Court. The suit is the second EMI has filed in recent years concerning music piracy in Ireland. In 2010 the High Court shot down an attempt by EMI to enforce a 3 strikes rule on internet service providers in the country.

[Source: Irish Times]

Due to what it claims is a failure to receive any royalty kickbacks, EMI Music Publishing has filed a lawsuit against Grooveshark’s parent company, Escape Media Group. The New York Times explains:

In the suit, filed in New York State Supreme Court in Manhattan, EMI seeks unspecified damages. But in a series of recent e-mails and legal correspondence included with the filing as evidence, EMI asks Grooveshark for at least $150,000 in royalties.

Grooveshark says its service is legal under the Digital Millennium Copyright Act, a federal law that protects Internet companies that host third-party material if they comply with take-down notices from copyright holders.

EMI is the fourth corner of the major music label square – the other three being Sony Music, Warner Music Group and Universal Music Group – that is suing Grooveshark over licensing and copyrighting issues.

According to a statement provided to The Times, Grooveshark believes that “this is a contract dispute that we expect to resolve.” While that’s an optimistic outlook, this latest legal action against Grooveshark leaves little to look forward to in the future as they’re now involved in litigation battles on four separate fronts. Personally, I don’t like this news and hope Grooveshark can resolve these issues because if they disappear I’m gonna be left without a dealer to get my Philip Glass fix. Having said that, it doesn’t look good for home team.

According to a Bloomberg report, Google is very close to an agreement with Universal Music Group that would allow Google to sell their artists’ music in their new download store. When the Google Music Store was hinted at back in October, the sources said that 4th-largest record label EMI had already signed on. That secured artists like Coldplay, Pink Floyd, Katy Perry and (most of) Radiohead for the Google Music Store.

Making a deal with Universal would be a much bigger content grab than EMI – since they are the largest record label in the American music industry. Coming along with Universal would be artists like Lady Gaga, Lil Wayne, Eminem, Rihanna, and Taylor Swift.

The report says that the Google/Universal deal could be finalized as early as Wednesday, November 16th. That date coincides with a Google event in Los Angeles where it’s highly speculated that Google will unveil the new Music Store. Invitations to the event were sent out last Friday on 11/11/11 by “Nigel Tufnel.” The invitations simply said “These Go To Eleven.”

The Google Music Store will work hand in hand with Google Music Beta, allowing for purchased songs to be stored in the cloud and accessed from any enabled device. There have been rumors that the Music Store will be integrated into Google+, allowing users to share songs with friends and preview tracks before purchasing – rumors that this Bloomberg report corroborates.

Google Music Beta launched as a simple cloud storage service without any sort of music downloading functionality due to the inability of Google and the record labels to work out deals. Since Beta’s launch, the launch of a Music Store seemed inevitable, but the specific “when” and “with what music” questions are finally being answered.

Apparently, Google is still unable to work things out with Sony and Warner Music Group, the second and third largest labels.

Last week, deals were reached to break EMI Group in two, and those separate parts be sold to Universal and Sony. According to the WSJ, EMI’s record-music unit will go to Universal and its Music Publishing will so to Sony.

Hopefully we get more details at the Google event tomorrow. If you’re impatient, however, you can check out these supposed leaked images of the Music Store via the Android Market.

EMI joins Universal Music Group and Sony Music Entertainment in what is being called the "Hulu for music videos." So far Vevo has not reached a licensing agreement with Warner Music Group.

EMI will not hold a stake in Vevo unlike Universal and Sony. Users will be able to watch music videos from artists on EMI’s labels including Astralwerks, Blue Note, Capitol and Virgin, as well as the independent artists and labels represented by EMI Label Services and EMI’ Caroline Distribution unit.

"Our agreement with EMI Music marks a milestone in our mission to provide fans everywhere with the world’s best premium music video programming, when, where and how they want it," stated Rio Caraeff, President & CEO of VEVO.

"We look forward to collaborating with EMI on introducing our users to new professionally-created entertainment products through a truly interactive platform.

Vevo will be powered by YouTube and the content will be made available on the site, on Vevo, and through a special branded embedded player. The video service will also act as a syndication platform for additional sites, expanding the reach of the Vevo brand online.

In October Vevo signed on AT&T as its first major advertiser. The announcement did not include details about ad revenue sharing, but AT&T said it would support Vevo’s services across multiple connected platforms.

Related Articles:

> Vevo Gets Official Launch Date

> YouTube is Going Through Changes

> MTV Offering…Music Videos?

> AT&T Strikes Ad Deal With Vevo

The deal, according to the New York Times, is to give artists Norah Jones her own channel (which is already live), and over time, add more EMI artists. The Norah Jones channel has all of her music videos, concert footage, and interviews.

EMI is only one of four major labels, and the smallest one at that. So, even if more EMI artists begin getting their own channels on Hulu, that would hardly make it THE place to go for music video content. However, Hulu appears optimistic that it will get deals done with other labels in the future. Brad Stone with the NYT reports:

Andy Forssell, Hulu’s senior vice president for content and distribution, said that Hulu toyed with the idea of putting tens of thousands of music videos on the site. “In the end, we thought the best starting point that fit with our mission, and with what our users expect, is a good mix of content, some music videos, long-form content and interviews, everything we can get for an immersive experience around certain artists,” he said.

Mr. Forssell said talks were continuing with the other labels and that ‘my sense is that we’ll be in relationships with all of them at some point."

Music fans already have other options for music video viewing of course. To name a few, YouTube, MySpace, MTVMusic, and the highly anticipated Vevo (which is still in the works) will provide plenty of competition for Hulu in terms of capturing those views. Terms of the Hulu-EMI deal are unknown.

Related Articles:

> YouTube and Universal Making a Music Video Site?

> YouTube is Going Through Changes

> MTV Offering…Music Videos?

> Will Hulu Charge For Content in 2010?

"We think services like Grooveshark offer great music discovery options for fans," said Mark Piibe, EMI Music’s Global Head of Digital Business Development.

Sam Tarantino,
Grooveshark CEO

"In turn, Grooveshark offers a new revenue stream for our artists and will help us learn more about how we can better connect different types of fans with artists."

Grooveshark allows music fans to stream music without having to download software or register. The basic service is available for free and is supported by advertising. Users of the site can pay $3 per month for access to Grooveshark’s premium service, which offers unlimited ad-free streaming music.

Grooveshark still hopes to strike deals with the remaining major record labels including Sony, Warner, and Universal. Those deals could be reached within the next six months.

"EMI Music and EMI Music Publishing have collaborated with us to create a mutually sustainable deal which represents the future of digital music," says Grooveshark CEO Sam Tarantino.

"We will continue to deliver the best music service on the Internet to our users, and we will expand our capacity to strengthen fan-to-artist connections through our technology."

Terms of the deal between Grooveshark and EMI were not disclosed.

Douglas Merrill
(Photo: Google.com)

Digital Daily noted the Valentine’s Day, 2008, quote from Merrill, where he called his position at Google “the best job in the world.” He will take up a task with EMI to run their digital initiatives.

John Furrier picked up on Merrill’s see-ya email to Googlers. Furrier said Merrill will try to figure out what EMI can do to make its business models more relevant to modern times.

Merrill won’t despair for a lack of challenges. The music industry as a whole has suffered as fans increasingly opt to obtain music digitally rather than buying CDs. Blame the labels for setting themselves up for a fall; after years of getting burned with high-priced CD purchases containing one or two good songs, fans had no qualms about ditching plastic for MP3s.

The Google executive’s departure comes amid a steady stream of Google higher-ups streaming for the exits. Variations on the “seeking new challenges” theme occur regularly when people like Merrill and new Facebook hire Sheryl Sandberg depart.

For folks who were with Google long enough to watch their stock options turn into real wealth, there’s probably little motivation to doing the same old thing each day. Without such a financial cushion, does a Douglas Merrill opt to parachute into the decaying remains of the music label industry, we wonder.

As the Los Angeles Times cited, EMI has lost money and artists, and is in the middle of serious cost cutting. If Merrill manages even a modest turnaround that stops the red ink from flowing, it will be an improvement.

Here are some recent highlights – and they are sad songs:

• Radiohead gives the finger to record labels and at the last minute releases their album In Rainbows on their web site.
• Sites like Imeem stream major label songs free on their site and of course there are plenty of illegal download sites.
• Or there is a Chinese search engine that ignors copyrights altogether (check this out).
• Paul McCartney ditches EMI and goes with a record label from a coffee shop label (Starbucks’ Hear Music) and it proves successful. It sold more than 160,000 copies in its first week.
• You know things are bad when a business starts to sue their customers.
• Music label EMI says they are cutting staff by 2,000 and other labels have or cutting staff.
• People are buying songs rather than CDs, which has had a huge impact on sales. CD sales are down 19 percent and keep dropping.
• DRM issues have soured customers – they restrict what devices play downloaded music.

It seems like almost everyone is giving away free music downloads these days. You can get free music with your fast food (would you like some music with your meal?). You can get free music with your cell phone. What’s next? Oh yes, free music downloads with your Pepsi.

The Super Bowl played a major role in helping iTunes gain exposure. Now, iTunes is losing popularity with the music industry because of strict pricing and terms. Even though iTunes dominates the market, they have a new blow. The Super Bowl says they’ll work with Amazon’s music download site instead of iTunes. Amazon’s service just launched this September and it’s far more open. Record companies might be the next to favor Amazon.

Comments

On his blog yesterday, Robertson describes Sideload this way:

Sideload is an audio search engine. It has links to audio files and shows you where those files are on the net. Sideload does not host any files. There are many, many such search engines….Many people simply use Google, which is likely the biggest audio search engine in the world. Any complaint against Sideload could be leveled against Google, Yahoo, MSN, and Ask since they all have links to song files.

Another point of contention in the lawsuit is MP3Tune’s Music Locker, an online storage service. While EMI contends that MP3Tunes makes unauthorized copies of digital audio files, Robertson differentiates by noting that users who own their music can store it on whatever device they please. Lockers are protected by user names and passwords, he adds, so they aren’t publicly accessible.

One interesting point of distinction in EMI’s suit, though, is that Sideload advertises on its site "Free Music On The Internet" and "424,337 Free tracks from 42,991 Artists." Additionally, any of the songs listed on the website can be listened to without leaving the website, which may make it different from Google’s services.

Then again, indexing has held up in court over the years, which is, technically, copying Internet files. But it may not play in Robertson’s favor that he offered to remove the links EMI complained about before lawsuits were filed. EMI attorneys wanted "substantial" compensation instead.

It’s been just seven years since Robertson was sued by the music industry. The 2000 case, a row over MP3.com, was settled for $100 million and Robertson eventually sold MP3.com to Vivendi for just shy of $400 million. Vivendi then flipped the domain to CNet.

But Robertson notes the difference between his former business at MP3.com and his current business at MP3Tunes. In the late 1990′s, MP3.com hosted music files and they could be downloaded directly. MP3Tunes, he says, does not host any music files. 

Robertson has described this new lawsuit as "retaliatory" after he filed suit against EMI to seek declaratory judgment that his business model is legitimate. EMI filed its suit shortly thereafter.

In interviews, Robertson has accused record labels of rushing to sue online music companies as lawyers seek to up their billable hours via drawn-out litigation. Instead, he says the recording industry should be looking to new ways of distribution in a more cooperative spirit.

He references specifically a technology developed through MP3.com that converted purchased CDs to MP3 files for listening while customers waited for the CD to be shipped. But the RIAA saw my.mp3.com as an illegal database of some 45,000 CDs.

"If the music industry would have adopted this technology, it could have extended the life of the CD another 10 years," he writes. "But, it chose to sue MP3.com and missed a golden opportunity — CD sales are down a staggering 60 percent since that time. While MP3.com may be an interesting footnote in digital music history, MP3tunes is an entirely different company with different technology."

Though that argument didn’t convince the judge back in 2000, Robertson is banking that his new service is covered by the Digital Millennium Copyright Act, that it counts as an audio search engine, and that people have the right to store the music they own in whatever form and on whatever device they choose.