Play Nice: RIAA Battles Project Playlist

Article ImageIn the next iteration of the protracted battle between the recording industry and online music networks, both MySpace and Facebook have agreed to remove the popular Project Playlist widget from their sites. Succumbing to pressure from the Recording Industry Association of America (RIAA), which claims copyright infringement, the sites issued takedowns in mid-December 2008.

Project Playlist enables users to create custom playlists, share those lists with others, add playlists to profiles on social networking sites, and buy ringtones. When a users searches for songs or artists, however, the results link to other sites, which may offer illegal versions of songs.

The company is also being sued by Warner Music Group, Universal Music Group, and EMI for copyright infringement. But it announced an agreement with Sony BMG Music Entertainment in December, allowing users access to the label’s complete audio and video library. Project Playlist, which was unable to respond to requests for comment by presstime, has been in talks with other labels and artists, but, thus far, the agreement with Sony BMG is the only one on the books.

Project Playlist got itself a new CEO in November when former Facebook executive Owen Van Natta joined the company. Van Natta arrived about the same time as a rumored $18–$20 million investment from Pilot Investment Group. Both the funding and addition of a seasoned executive indicate a move toward stabilizing Project Playlist as a legitimate, legal business.

Analyst and president of Shore Communications, Inc., John Blossom, expects resolution to come fairly quickly, as Project Playlist works to settle the situation with individual recording companies before users drift to other networks. "Music companies have no choice," says Blossom. "They are well overdue to find effective business models online." He says the sophistication of a site such as Project Playlist that allows for significant interaction among users makes it valuable as a marketing tool for artists and labels and makes for a loyal userbase.

Indeed, most users posting to the Project Playlist forum are voicing their frustration with the takedown, although some are urging fellow members to step back and look at the benefits Project Playlist offers even without a social network connection. Meanwhile, Project Playlist continues to add new features in the midst of the lawsuits—a new social functionality, a search tool, and a player with drag-and-drop and shuffle capabilities.

"Services such as Project Playlist that allow people to search and organize music the way they like and share it with their friends—they are the radio stations of the future," says Blossom. He adds that sites such as Facebook and MySpace should remain open to experimentation and that "companies like Project Playlist are in a much stronger position than those the music companies challenged a few years ago," because of how CD sales have decreased and how valuable music-sharing and social networking sites have become to emerging artists.

Facebook, which sent a statement to EContent and declined to comment further, has indicated a willingness to reinstate Project Playlist when the music network’s legal troubles are settled. The statement says, in part: "The Recording Industry Association of America (RIAA) initially contacted Facebook last summer requesting the removal of the Project Playlist application for copyright violation, and recently reopened those communications. We forwarded the RIAA’s letters to Project Playlist so it can work directly with that organization and music labels on a resolution. In the meantime, the application was removed to comply with the Facebook Platform Terms of Service."

MySpace has also expressed interest in reinstating Project Playlist. "MySpace has received notices of infringement about Project Playlist at different times from several of the major music companies currently suing Project Playlist. Per our policy of taking very seriously the requests of rights holders to block access to third party sites that are believed to be infringing, we have evaluated the requests of the major music companies and determined that it is in our best interest not to allow Project Playlist widgets on MySpace," said the company in a statement to EContent. "Any third party widgets (including any music widgets) are welcome on MySpace so long as they do not include infringing content. …"

MySpace previously blocked Project Playlist in March 2008, prior to its launch of MySpace Music in September. Although MySpace denies any connection between the launch of MySpace Music and the Project Playlist takedown, Blossom notes that "it’s cheap research and development" to allow another company to see what works in your space and then launch your own product. Warner Music Group, Universal Music, Sony BMG, and EMI are all MySpace Music partners.