Megaupload Launches Music Service, MegaBox

    Online file-hosting website Megaupload is currently suing major record company Universal Music Group. Here’s a quick rundown of the situation so far: Megaupload created a video advertisement featuring artists like Kanye West and Snoop Dogg who support the service; Universal subsequently took the video off YouTube on the grounds that it has the right to block copyrighted material featuring the participating artists. Megaupload is arguing that Universal is only obstructing free speech with its action.

    According to Digital Music News, Megaupload’s new venture, MegaBox, is a “cloud-based music locker, download store, and do-it-yourself artist service.” So far, partners of MegaBox include 7digital, Gracenote, Rovi and Amazon, the world’s largest online retailer. Megaupload founder Kim Schmitz said Universal “knows that we are going to compete with them via our own music venture called, a site that will soon allow artists to sell their creations directly to consumers while allowing artists to keep 90 percent of earnings.”

    Even more interesting is Schmitz boasting another service called Megakey, a solution he says will allow artists to generate income off of free downloads. While the service itself may not seem all that revolutionary, this type of forward thinking signifies the growing rift between the past and future of media distribution. In regards to traditional record companies operating in the digital age, Schmitz said that “the rip-off days are over.  Artists are more educated than ever about how they are getting ripped off and how the big labels only look after themselves.” It’ll be interesting to see if MegaBox catches on and, if so, where this dialogue moves from there. [DMN]