What do you do when the choice is between entering an international trade body and maintaining a marginally legal music sharing network? If you are the Russian government, the answer is to let the music die.

AllofMP3

AllofMP3.com was the almost certainly illegal music sharing network that once stood as one of a handful of sites that managed to not only get people to download songs, but actually got them to pay for them to boot. With songs being offered for $.20 and under along with very legitimate copyright concerns, AllofMP3′s “hope no one catches us” business model was bound catch up with it. In this case, the hammer was dropped from a surprising corner, namely the Russian government itself.

The site was reputed to have 5.5 million subscribers with revenues in excess of $30 million dollars. In Britain, it is believed that it was second only to iTunes for the number of songs sold. The idea was initially brought to life by 6 programmers who wanted to use the site for personal use, but seeing its potential eventually transformed it into a business.

Analysis

Pressure from the U.S. and the international community was the major driving force behind Moscow shutting down this hotbed of illegal song trade. This does not mean that piracy died with the closing of AllofMP3. Soon after the site closed, another product — mp3Sparks came to take its place. The company that created this product, MediaServices, says that it is legal under Russian law.

Whether other nations will buy into this is still up in the air. It is likely that MediaServices is moving quickly to try to fill the void that AllofMP3 has left in the free to cheap music market.

Web 2.0 Roundup

Music sites come and go, so shutting down AllofMP3.com is going to do very little to curb piracy. Sure, the company was profiteering off of property that was not necessarily theirs to resell, but until record labels give consumer real impetus not to pirate, this will only redirect the masses to other sources of songs.

The music industry would do well to mark this day on their calendars. Not that it will prove to be the beginning of the end for piracy, but it might be the biggest proof that simply strong arming the problem away is futile at best.

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