Is Mp3million Legal?

Is Mp3million legal?

If you've been buying songs off iTunes for $0.99 all you're life, you'd probably be skeptical if someone told you could've been paying $0.10 all this time. Most people are.

So is Mp3million really legal?


The short answer: Yes. It's legal. 


The long answer shouldn't be that long, but because I like to be thorough and I really like to rant, the long answer is really really long.

Is Mp3million Legal- Royalties

 

In order to determine whether or not Mp3million is legal, we must first understand how artists are paid for digital downloads of their music.

Like physical copies of music, whoever holds the rights to the royalties of the music, receives royalties for each redistribution of  song, at a certain rate per song. This rate, however, varies by country, namely; in and outside of the United States.

Notice how the website "Tunecore.com" explains this:

Income Type: Digital Download Mechanical Royalties

Description:

A royalty generated from the “Reproduction” and “Distribution” copyrights. This royalty is owed to the songwriter for each and every unit downloaded.

Who/What Generates and Pays this Royalty:

Any download music services: i.e. iTunes, Amazon, Google, Beatport, Spotify, Rhapsody, Xbox Music, Verizon, etc., as well as any “direct to fan” sales (i.e. RootMusic, TopSpin, etc.).

Amount owed to the songwriter:

It works the same as physical reproductions.

• In the United States: $0.091 per reproduction of a song. If it’s over five minutes, a formula rate kicks in. The U.S. Government sets the rate.
• Outside of the United States: There is no government-mandated rate, however, the royalty rate is typically 8% - 10% of the list price (varies by country)." 
  

 Do you notice how in the United States this is a fixed rate, while in other countries it normally varies from 8% - 10%?

This is important. Mp3million is located outside of the United States.

This means that when you buy a song from a service like iTunes, the songwriter earns approx. $0.091. In contrast, assuming a 9% royalty rate, when you buy a song from Mp3million the songwriter earns aprrox. $0.009.


Yes. Artists make less money when you buy music from Mp3million then when you buy from iTunes or Amazon or whatever. That's because you're paying less money. What did you expect?

So, Does Mp3million Pay Royalties to Songwriters?

We care about this.

This is where the real question of legality comes in to play. As long as Mp3million is paying royalties to songwriters, this music store is legal. And while like any other business, we can't know for sure what goes on behind closed doors, I do have an official message from them with their answer:

____________________________________________________

You wrote: 30.03.13 21:17:31

Do the artists get the same amount of money when people buy

from mp3million as they do when people buy from itunes?

Mp3million.com support reply: 30.03.13 21:17:31

Dear friend,

This is a part of our commercial information that we can not disclose. Nevertheless, we'd like to mention that service www.mp3million.com pays full-scale author's royalties to owners of pieces of music, trademarks, names, slogans and other copyright objects used on the site. Any further distribution, resale or broadcasting is prohibited.

Thank you for using our service. Feel free to contact us if you need any further information.

We wish you a very happy Easter,

Lily

The Mp3million Team

_____________________________________________________


So there you have it. On paper, Mp3million is legal. (Excuse the naive question asked on my part. It was many moons ago. I was young. But my heart was in the right place. And that's what counts, right?        Right?)



But, to make sure we've covered all our bases, let's take a closer look at Mp3million to determine the plausibility of it's legality.

(Kind of like Mythbusters, but less science and more blogging.)

Is Mp3million Legal- Low Prices 

 

If Mp3million's prices are so low, is it even possible for them to be paying full royalties to songwriters, while still pulling in a profit to keep their business running?

Let's see.

On the Mp3million website, under the FAQ section, they give two reasons for why their prices are so low:

1. They are located outside of the United States to minimize taxation.
2. They have guaranteed bulk purchases.

Mp3million requires a minimum deposit of $15 to begin purchasing music from their store. Assuming a 9% royalty rate - though frankly it could be less - and assuming the customer is primarily buying full albums with a 20% discount, that comes to approx. (very approx.) $1.40 in royalties per $15 deposit, or a minimum of $13.60 per customer.

I started to do an experiment to try and calculate their various expenses and gross profit based purely off of relative estimations to determine the plausibility (or busted-bility) of Mp3million's legality, but I realized quite quickly I was being overly ambitious.

In any case, based solely on their pricing structure, it is plausible that Mp3million is indeed paying full royalties to songwriters.

But we're not done.

Is Mp3million Legal- Terms and Conditions

 

 Looking through the Mp3million legal Terms and Conditions, I found this:

          "9. Loss of Rights by Site.

Site may at any time lose the right to make certain Tracks and/or Materials available. In such an event, you will no longer be able to access these Tracks/Materials from Site's Library function or obtain them from the Site's catalog"

  This statement does reflect well on Mp3million's legal processes, however, I have never personally experienced this happening before. So unless someone who has expeirenced this with Mp3million could please comment, this doesn't do much for the plausibility of their paying royalties.


It is also interesting to see certain music on Mp3million that it would seem unlikely that they were really able to get the license to redistribute digital copies of the artist's music. I'll quote this Lifehacker answer as an example. Referring to Mp3million as well as various other online music stores:


            "Every time I have checked these sites, I’ve always been able to find material from artists who don’t license their material for any streaming or download services. For instance, Garth Brooks remains a  holdout worldwide, but it’s easy to find his material on the sites you mention."


Of course, since then Garth Brooks has agreed to digital redistribution of his music, but there are still other artists on Mp3million that call in to question Mp3million's "practical legality", that is, whether or not they really are paying full royalties to songwriters.

Is Mp3million Legal- Legal Info

Ah, for our final subheading on determining the plausibility of Mp3million's practical legality, we will look at the small paragraph they have under Legal Info on the Mp3million website. It reads as follows:


         "All materials distributed through the Mp3million.com authorized by the license # 67/17M-10 of the Rightholders Federation for Collective Copyright Management of Works Used Interactively (NP "FAIR") issued for Mp3million LTD."
  
After researching NP FAIR and the listed license, you find the site claims to be upholding Russian law. However, Mp3million's legal info is very similar to other Russian music store sites that have been shut down due to not paying royalties on their music. I'll quote the article I found from themusicvoid.com. And I apologize, it is quite a long quote.

"A few years ago the hugely popular AllofMP3.com, a Moscow-based service that undercut iTunes by enormous margins, was the bane of the major record labels. Not only did they undercut iTunes by massive margins, but you could also buy the entire Beatles catalog for about a buck an album. As a result, AllofMP3 became the second largest music service in the UK with a 14% market share, making record executives absolutely apoplectic.
 
The website, run by MediaServices Inc, claimed that everything was licensed by the Russian Multimedia and Internet Society (ROMS) and the Rightholders Federation for Collective Copyright Management of Works Used Interactively (FAIR). MediaServices said that it paid license fees “subject to the Law of the Russian Federation”.

At the time it was suggested that the service fell through a loophole in Russian law; that public performances of recorded music do not require the authority of copyright holders; that the website paid ROMS and ROMS compensated the artists; and that AllofMP3 operated within a grey area of the law.

The IFPI said that ROMS may be a collection society, but not only wasn’t it paying the artists, it wasn’t even licensed by the labels to collect anything for them at all.

Whatever the situation was, the IFPI had a hell of a time trying to get Putin & Co.to shut the site down. Eventually they were able to put enough pressure on the credit card companies to persuade them to no longer honor transactions from MediaServices."

The similarities between  Mp3million's legal info and this illegal music service are striking, but keep in mind, the other site was only illegal because they weren't paying royalties. 

But that was five years ago. And Mp3million was already up and running then, and continues to be now.

A similar article from bit-tech.net relates how PayPal and Credit card companies were targeting similar Russian music services on the basis that they were not paying royalties to artists and record labels.

That was back in 2011.

So why is Mp3million still online with the option to pay with a Credit card? Could it be that Mp3million is the exception to the "Illegal Russian Music Service" rule, and they are in fact paying full royalties to songwriters and their respective record labels?

It's hard to say for sure.

Is Mp3million Legal- Concluding Thoughts

 

So yes, in theory Mp3million is legal. We say "in theory", because in a practical sense, it really comes down to what they are doing behind closed doors; whether or not they are really paying full royalties to songwriters.

We've considered a few factors both for and against the likelihood of this fact. They are, in summary:

For:

• Mp3million officially states that they pay full-scale author's royalties to owners of pieces of music, trademarks, names, slogans and other copyright objects used on the site.
• Bulk purchases and low royalty rates make it very feasible for Mp3million to be paying royalties.
• Mp3million is still up and running while similar sites have began and been shut down.

Against:

• It seems unlikely that they really have the licenses to redistribute certain songs on their site.
• Their legal info bears a striking resemblance to other Russian music download sites that weren't paying royalties.

 After considering this information, the evidence has definitely earned Mp3million a certain badge...

So, Is Mp3million Legal?