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What Really Killed MegaUpload? MegaBox, That's What...

Wednesday, January 25, 2012
by  paul

It never saw the light of day, for obvious reasons. But the beta-stage MegaBox is now part of a growing conspiracy theory over why MegaUpload was so abruptly shut down.  And it's getting fueled by a deeply suspicious public, one struggling to understand exactly how US-based agencies like the FBI, DOJ and MPAA could turn the lights off on something overseas.  Especially with little or no warning or easily-understood due process.  And, right as SOPA was getting shelved.                

This isn't coming from Deep Throat; it's not an anonymous tip.  Rather, it's an idea that started gaining steam a few days ago, maybe on Reddit, who knows.  But it's since bubbled onto Twitter, forums across the world, Google+, and now, places like TechCrunch and Forbes.  Because it's not the illiicit file-sharing, copyright violations, or money-laundering that did MegaUpload in, according to the outcry, but a bullying big media afraid of a game-changing competitor. 

And it's confusing exactly who was on which side.  Just ahead of Christmas, MegaUpload started previewing MegaBox with 7digital, Gracenote, Rovi, and Amazon MP3 listed as partners.  The beta-stage MegaBox was a combination locker, download store, and platform for do-it-yourself, emerging artists.  "We take music distribution very seriously, so we partnered with some of the best in the industry!" the pre-launch collateral declared.  

That doesn't mean formal agreements were in place - integrated Amazon MP3 links, for example, can be created without the company even knowing.  Either way, the pre-release demos positioned these 'partners' as a team, and this thing was definitely going live.  

And, it was being positioned as a major stab at major labels, particularly MegaUpload nemesis Universal Music Group.  "They don't understand that the rip-off days are over," Kim Dotcom told Torrentfreak.  "Artists are more educated than ever about how they are getting ripped off and how the big labels only look after themselves."

 

This is another screenshot from our coverage on December 21st, when MegaUpload founder Kim Dotcom was filing suit against Universal Music Group over the 'MegaUpload Song,' inking Swizz Beats into the CEO chair, and showing the world a contract signed with will.i.am.  It was an all-out-war, that is, before the US Government dropped its game-ending bomb.

 

But the deeper question surrounds one awesome number: 90.  That is, MegaUpload was planning to offer 90 percent of revenues back to artists, even on free downloads.  Which sort of fits into a very shady revenue model that actually paid uploaders based on the number of subsequent downloads received.  "We have a solution called the MegaKey that will allow artists to earn income from users who download music for free," Dotcom outlined. "Yes that's right, we will pay artists even for free downloads.  The MegaKey business model has been tested with over a million users and it works."  

Theoretically interesting, though we've heard that some major rappers were already making money off of MegaKey, and rumors also point to development efforts by incoming CEO Swizz Beatz.  Which sort of corresponds to what Busta Rhymes was angrily tweeting a few days ago.  "1st of all I am soooo proud of my brother @THEREALSWIZZZ 4 being apart of creating something (MEGAUPLOAD) that could create the most powerful way 4 artists 2 get 90% off of every dollar despite the music being downloaded 4 free..."

But it's all just a theory...





  • Comments Closed
    Comments (63)

    Allen Wrench Wednesday, January 25, 2012

     MegaUpload Mafia

    Who the fuck would do business with a guy that had MAFIA as a front plate on one of his luxury cars?

    You would trust credit card and other sensitive information with Kim Dotcom? If yes, please do the rest of us a big favor and confirm it in public, with your name/surname or company name. So that we can stay the fuck away from you at all costs.

    Seriously, what is wrong with you Americans? Twitter, Facebook and Google have swallowed your brains like a chocolate bar. It used to be McDonald's assignment, but apparently they did a lousy job at it. Here you go, your brains on a plate. Enjoy. Retweet.

    I can't believe people *inside* the music industry are re-posting this shit about MegaUpload's "big idea". You are morons. In fact, morons are going to sue you for defamation. You are giving morons a bad name.

    I got some breaking news for you: you can keep 99,9% of your sales. Just get yourself a .com and a PayPal account. Why the fuck do you need Kim Dotcom to handle the transactions for you? Are you that stupid?

    Ah, but he would monetize piracy, the MegaMorons say. How the fuck do you know? You read minds? Your grandfather used to read minds during the cold war and now you are using the family's legacy for the good of the music industry? You got some kind of inside information that Kim Dotcom was going to be a decent citizen?

    So, you got a Twitter account and suddently you know more than your FBI and State Department knows about online fraud. Really? Then enlighten us, please. I want to know, I want to hear some technical details from all you gurus. You can't even keep spam bots out of your blogs. How are you gurus?!

    Grow the fuck up already, you are an embarassement for the whole planet. God forbid the aliens pay us all a visit this year and they decide to land at a "hip" place in the United States.


    Pablo Walnuts Wednesday, January 25, 2012

    Sure, your comment makes perfect sense.  Just like the FBI raided something thousands of miles from Washington makes perfect sense.  Because there were servers in Virginia... eh, yeah right!

     


    you are a sheep Thursday, January 26, 2012

    The NZ police special agents raided Kim Dotcom and his gang.

    The FBI agents were there to provide intel, assist in the extradiction process and escort the gang to the US.

    You can't just board an arrested gang on a plane, the receiving country's agency must have its people there, from airport to airport.


    Not A Shill Wednesday, January 25, 2012

    Wow, why so angry?

    Considering the loss of sensitive information by major companies only recently, anyone not using a single use generated credit card number is taking a risk. However, considering that my cards are protected from any unauthorized use, that risk would amount to little more than an inconvenience. I believe most cards only hold the recipient responsible for $60.

    Also, I've failed to hear of anyone's account being abused as a result of being a subscriber to Megaupload, or any of their other sites over the last, what, 6-7 years?

    Ad hominem attacks questioning the intelligence of any potential users are rather bizarre, and really just demonstrates your own lack of knowledge. Is this really perceived as a way to steer individual perception? I'll admit it is prevalent in comment sections, but only by shills and those struggling with feelings of powerlessness in their lives.

    I had to wonder why the music video, why choosing Swizz Beatz as CEO, and why Megaupload when it isn't the largest, or oldest file sharing site around. Now it is clear, the site was going to seriously challenge the old order of business further, and once again the US government is acting as their hired gun.

    I'm no fan of sites which offer copyrighted software and music for profit. I was further disgusted by reading the indictment, which details the email exchanges, the conveniently ignored MD5 hash which could have been utilized when responding to takedown notices, but I am completely horrified by how the governments are being utilized to serve corporate interests.

    Now, assuming I am wrong and you fall into the latter category, the benefit to artists would be a large site with no advertising costs, no website overhead fees, a huge buying audience, and most of all, accessibility for aspiring/unknown artists. Buyers would be coming to Megabox to purchase music and could be swayed by free tracks and samples to other artists. There is a potential for artists obtaining new listeners by exposure.

    Gift cards to such a huge venue would become immensely popular, which would put a large hurt to both the old order, as well as iTunes. When you consider the interest the venue was getting from artists, I don't think it is a stretch to put forth this as a theory behind the timing of the indictment.

    Perhaps you should invest in a tin foil hat to help shield you from those rays when the aliens do land. Oh, and clean up your language. You kiss your mom with that mouth?


    !!! another victim !!! Thursday, January 26, 2012

    Your ingorance concerning online fraud and credit card scams is very sad. Please go read some VISA/MASTERCARD white paper. Enlighten yourself.


    ~s~ Thursday, February 02, 2012

    Ye, like anyone will believe you.


    David Allan Thursday, January 26, 2012

    A perfect response! I couldn't have said it better myself.

    Jan Schlüter Thursday, January 26, 2012

    Word up !

    This is so true !

     

    On and btw Mister Kim .com got several law suits here in Germany. He is a true criminal. So you the clever jourlaists should start digging on this end and then may be they will find the truth and not sharing some obscure "pirate" or whatever lobby shit !

    Wake up and dont confuse people anymore, please.

     


    @madktc Thursday, January 26, 2012

    you can keep 99,9% of your sales.

    If you use paypal, they take almost 9%.  Sounds like Megaupload was going to be the payment processor and the distributor.  This completely levels major label(s) and Spotify.

     

     


    no clue? Monday, January 30, 2012

    Wannabe payment processor through PayPal. Why the fuck you need someone else (A CONVICTED FELLON) to run your PayPal incoming? Are you that stupid?


    butts Wednesday, February 01, 2012

    but really y u mad tho?


    Terry Hart Wednesday, January 25, 2012

    The FBI must be really, really good then, if they started investigating a company in March 2010 to shut down a service it wouldn't even announce til December 2011.

    Victim of "JM" and the FBI Thursday, January 26, 2012

    A fat man from a suburb of Seattle directly and provably defrauded environmental friendly vehicles enthusiasts out of an estimated 5 million dollars. When both the request by the victims and EV DIY industry as as whole requested help from the FBI and Rob McKenna's office the universal response was it was a civil matter and go fuck yourself. When a civil suit was brought against him for this crime the judge basically and purposely dragged the case on to the point those that tried to get justice that way ran out of funds and had to settle in-favor of the criminal or come up with another 80k to take it to court. I'm glade I didn't waste and money joining that group.


    BUT when and asshole from RIAA CLAIMS that 500 million was stolen (unprovable and probably using the calculation of $150,000 per offense as all other RIAA cases) they violate another nations sovereignty.


    All I can is:

    WHAT THE FUCK????


    David G Thursday, January 26, 2012

    I think you might have a point. But how about keeping peoples weight out of the discussion. If I am getting screwed  by someone, I am thinking that their appearance is not going to matter a whole lot.

     


    ISMX Thursday, January 26, 2012

    "they violate another nations sovereignty"

    Shut the fuck up and read:

    http://www.legislation.govt.nz/act/public/1999/0055/latest/whole.html#DLM25689

    newzealand.usembassy.gov/uploads/images/o16y8MOyHW2l-jJTxaMpeQ/ExtraditionUSNZ.pdf

     

     


    Joska Pista Sunday, January 29, 2012

    So, how are those links provided prove your point actually?

    The 1st one points to the restrictions part of the extradiction act. It actually contains a restriction in case when the accusations are made in a bad faith, wich I think applies here. Also there is a restriction in case the one to be extradicted is likely to face prejudice - and it really seems that they are preparing a mock tiral here!

    The 2nd link points to the 1970 extradiction treaty, in wich there are clearly written on what charges can someone be extradited. Piracy is included but only in its classic meaning of armed robbery on sea. Copyright infringement is not included.

    So it really seems that the extradiction was in fact unlawful.

    So, how does this prove that they didn't violate other countries soverignity?

    (Also there are two defendants not from New Zealand, one from Slovakia, the other I don't remember from where. In their case your links are totally useless to prove anything.)


    JJWZ Monday, January 30, 2012

    New Zeland authorities have refused the US military from doing nuclear tests. Much more important than you having access to MegaPorn...


    SW Thursday, January 26, 2012

    500 mil/150 k = 3333.33

    I'm no expert, but I am fairly certain that more than 3k songs were pirated last year.


    BULL Thursday, January 26, 2012

    Yawn... the guy wants to reinvent the wheel...

    " Hey people, i've just invented a way for artists to sell without a record company. This has never existed before.  That's why everyone wants to kill me".

    ( Could someone send him links about Tunecore, Bandcamp, Topspin, CDbaby, etc.. ?)


    Me Thursday, January 26, 2012

    I wasn't aware that those sites paid artists for free downloads.


    Ding Ding Ding Thursday, January 26, 2012

    But you should be aware that Kim Dotcom was already a convicted fellon when he started MegaUpload.


    80% of nothing is still nothin Thursday, January 26, 2012

    I don't get the 'paying artists 80% of revenue ' for 'free' downloads.

    So 80% of online ad impressions from the page that the content resides?

    Either way- the model wont work.

     

     


    BULL Friday, January 27, 2012

    "I wasn't aware that those sites paid artists for free downloads."

    No, they don't. Youtube and Spotify do. They give you 0,00000000000000000000000001 cent for every million view. Just like your vaporware Megabox. At least on Spotify you can take down your music if you want. 

     


    william hil Thursday, January 26, 2012

    It started off good and then you changed your tune to be some angry noob.

    What ever what you look at it, a full take down like this is un-called for and changes the game on the net.

    it's pretty simply, if your an artist and you make your own megabox it means nothing without the millions of visitors kim can provide on his network, simple as that. traffic is golden 


    BULL Thursday, January 26, 2012

    Actually, iTunes has the biggest numbers. Try 200 million accounts. Call me crazy, but  i'd rather do business with Apple than with the Mafia.


    the fuck? Thursday, January 26, 2012

    Traffic costs money, you fucking ignorant ape.


    Idiot Friday, January 27, 2012

    Wow, you really are a dumbass. You can profit from traffic by renting advertising spaces. Any fucking website would die for having traffic in the millions.

     

    Your logic is ... If x website have more traffic the more money he lose. Then facebook and google should be down the sinkhole.


    cipher Sunday, January 29, 2012

    The question is...where is this heading and what will be the out come. Technology has made "pirating" possible . It started with audio tape and VHS.There was much debate about Beta versus VHS. It was easier to copy with VHS.It seems that pirating is here to stay. The debate goes round and round with no conclusion.

    Is it about price. Does it have merit if down loads were of high quality and competitively priced. I subscribe to the principle that people who create should have monetary gain if they wish.

    cipher


    U668 Monday, January 30, 2012

    Facebook and Google have their own global datacenters, you monkey with a keyboard. It's their fucking property. And they sell the data to the highest bidder. Usually, that means "governments".

    Welcome to capitalism.


    Jeffinbelize Thursday, January 26, 2012

    If you've purchased any music released by any of the major labels within say, the last 50 years, you're already doing business with the Mafia...


    BULL Thursday, January 26, 2012

    We're talking about indies here. Was the vaporware Megabox directed at Major labels ? No.


    lots of info Thursday, January 26, 2012

    oh boy Thursday, January 26, 2012

    Just made a note to myself, never to do any kind of business with this Arnaud Delafosse...he seems very attracted to money laundering setups...!


    Harry Thursday, January 26, 2012

    "integrated Amazon MP3 links, for example, can be created without the company even knowing"

    Bullshit. Did someone from Amazon actually told you that, or did you just made it up on the spot? It's basic analytics, Paul. You should research these kind of things before you write about them on your blog. Come on, you are much better than that!


    MisterSoftee Friday, January 27, 2012

    "Basic Analytics"

    meaning... what exactly?


    404 Friday, January 27, 2012

    Al Thursday, January 26, 2012

    The real MAFIA is the US Gov and multiNAZIonal allies, provoking wars and cleansings responsible for the deaths of millions since WWII.

    But nice try from the King's agents as those manipulations worked before as crowd controll and psychological mass operations.

    http://en.wikipedia.org/wiki/Psychological_manipulation#Vulnerabilities_exploited_by_manipulators

    http://atheism.about.com/od/atheistactivism/tp/RulesRadicalsAtheistsAlinksy.htm

     

     


    medical Thursday, January 26, 2012

    Hallucinations from the lack of warez?


    @shootbydaylight Thursday, January 26, 2012

    I'm inspired by what Tunecore and MegaBox are doing for musicians.  Sad to see the RIAA and major labels trying to kill a better way.


    nope Thursday, January 26, 2012

    MegaBox is not doing anything to musicians, thanks to the hard work by the FBI agents. Tax money well spend. I hope Rapidshare is next. Fuck your affilliate rings!


    @danasedgwick Thursday, January 26, 2012

    I don't love conspiracy theories but this one I actually believe.


    Sure! Thursday, January 26, 2012

    Yes, because it is very convincing to hear that a known mafiozo is promising to go legit. It happens every day.


    @pmmowen Thursday, January 26, 2012

    Why do people think is what killed MegaUpload?


    @DescuentoVegas Thursday, January 26, 2012

    Megaupload's owner was going to work on a music platform to help artists! Why is he in jail? Who is behind this?


    keep breathing! Thursday, January 26, 2012

    He was convicted a lot of times in the past. Perhaps you could use Google and find out why.


    @Tinfoilhatter Thursday, January 26, 2012

    Aren't their views obvious?  The tinfoil rumor is that this is what closed MegaUpload, that this would kill the music industry?


    @whatnottodobook Thursday, January 26, 2012

    Tell the White House you were mislead about MegaUpload.  THe real reasons!


    they know! Thursday, January 26, 2012

    You do understand that the White House is getting regular briefings by the FBI, CIA, NSA, right...?


    deeemm1 Thursday, January 26, 2012

    you guys are hilarious. no, there is no way an extremely crooked man could have a legitimate business venture to cover his tracks and take heat off his site. this has never happened before in the history of the world.

     

    if you really think about it, it was a pretty ingenious plan. he could form new illicit ventures under cover while running megaupload as a service to "pay artists for free downloads". that you can't and don't consider all possibilities while slinging around names and insults at people, it just makes you look more ignorant than the people you're shooting arrows at. basically, shut the fuck up and do some critical thinking.


    @RunOfTheCompany Thursday, January 26, 2012

    Megabox ... for this he will spend 50 years in jail!


    Jacobpapa/SC Thursday, January 26, 2012

    Take a look at the music and movie publishing industries...poor babies live in slums and ride skate boards to get from one place to another..don't you feel sorry for them? Pirated works, downloaded illegally, take food out of the mouths of their children, right..what a crock o manure..The RIAA and similar entities engineered all this to protect their cushy existance. Headed back to Warez to see if anyone out there is still permitting shared downloads....

    cipher Thursday, January 26, 2012

    I was under the impression that New Zealand had tough entry laws. The question is then.....How did K get through emigration if he had a criminal  record?

    cipher


    Rasc1 Thursday, January 26, 2012

    He made a significant purchase of bonds and donated a generous amount to the earthquake relief fund. He basically bought his way in. Not so common in developed countries, but considering the size of NZ, believable.

    What's really interesting is that New Zealand's extradition agreements with the US require the crime to have been committed within the US. It's arguable since he had servers in the US, but is outside the intent when written and should have been placed through the court system before the NZ government acted as it did.

    There's no doubt from the evidence in the indictment that Kim and crew were aware that much of their traffic was due to illegal items. It's also true that they made it difficult for infringing files to be removed completely. Firstly, there was a daily limit to the number of takedowns. Secondly, while those links were removed, the files themselves and any other links to the same file were not. Thirdly, they admit use of an md5 hash to verify files so that duplicates were not uploaded. While this helped reduce both disk space and bandwidth, it also shows that they were negligent in utilizing that hash to delete all links to the file and prevent subsequent uploading of those files.

    Between the emails discussing pirated items, payouts to uploaders of such items, and other incriminating evidence, it won't be difficult to prove that their efforts to comply were disingenuous. Whether it is worthy of a cooperative, international action is another matter entirely. But then, the courts won't be deciding that peculiarity.


    @andrei_chiffa Friday, January 27, 2012

    Cmon, you didn't really thought that 38 copyright-infringment files in Dallas were the reason Megaupload went down?


    @andrei_chiffa Friday, January 27, 2012

    Cmon, you didn't really thought that 38 copyright-infringment files in Dallas were the reason Megaupload went down?


    @robinm Friday, January 27, 2012

    It would have been perfect for everyone. No need for those pesky record labels.


    dotter Friday, January 27, 2012

    Did you know Paul Resnikoff is actually part Jamaican?  It's true.


    George Saturday, January 28, 2012

    This looks a lot more plausible than the story that Paul wrote.

    http://wp.me/pv6qp-Cw


    The Aliens Sunday, January 29, 2012

    We have decided, we will not be landing in the United States. That is all. 


    @Kizzycocoa Sunday, January 29, 2012

    First, I believe this 100%.


    i a back bencher in the house Saturday, February 04, 2012

    i have a criminal record and i still work in goverment :)


    www.MostObvious.com Wednesday, February 08, 2012

    the us government didn't go after this guy on their own will, but on the urging of giant media conglomerates that are lobbying congress. these are the same companies who support SOPA, and what people don't understand is the underlining motives behind all of this. There is a big shift in how we view media today, and traditional media companies have less market share with the advent of sites like hulu, netflix, youtube, etc. There are so many other people they could have gone after - so why MegaUpload? This is all about control of the internet medium. Kim Schmitz was about to launch his Megabox which would give artists 90% of the sale price. Big media companies and record lables cannot have that, and is why they strong-armed the government into going after Kim Schmitz. Do a little research and you will find he has a lot of support from famous music artists.

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