How Apple Influenced The Labels To Shut Down My Music Streaming Startup

https://medium.com/@492727ZED/steve-jobs-made-warner-music-sue-my-startup-9a81c5a21d68

by meeper16 • 11 years ago

303 93 11 years ago

JohnyLy• 11 years ago

This is why large companies should be more regulated. They should not be able to put pressure on labels or producers and get all the benefits. What Apple did by killing this startup is not ethical. Plus, by killing it, they tried to get a monopole. Microsoft got so many fines at the time because they had the monopole on PCs. If a large company tries to destroy startups just because they feel threatened, they should be penalised the same way Microsoft did (With huge fines) or I think of another way: forcing large companies to work with startups instead of shutting them down.

jevgeni8• 11 years ago

1. Apple was not a monopoly at that time. 2. How do you rigorously tell, which company is big and which is small? 3. This is a competitive market and ethics is not something that should be regulated. If people have a problem with a company's ethics, they should just stop using their products.

zlnimda• 11 years ago

Ethics and moral is regulated in some countries, because it's part of the law. USA are so retarded on that point, that's all.

And people who buys Apple products doesn't care what could do that company just because they are inspired by all the ads and hype around their products.

rimantas3• 11 years ago

Was Apple ever a monopoly? And just being a monopoly is not illegal.

geofft2• 11 years ago

I didn't downvote you, but I suspect you're being downvoted because there's a growing suspicion in these comments that this startup was breaking the law.

Large companies are more regulated in that regard: Apple can't deploy a questionably-legal music streaming service as easily as a startup can. Startups can afford to do this because the risk is that they shut down, the founders walk away basically intact because of the corporate veil, and nobody else is affected. Apple doesn't have that option.

If Apple were forced to work with the startup, the startup would have to adopt the same risk profile and approach to the law as Apple. Arguably, that's exactly what happened here, through Apple calling attention to them.

(Note that I'm not expressing an opinion on whether the law is correct. It is what it is. I hear good reasons to believe that Aereo was wrongly decided, but they still took a legally risky approach and lost at the Supreme Court, and the option for an orderly shutdown via bankruptcy existed because they were a startup doing nothing else.)

hellofunk• 11 years ago

there's a growing suspicion in these comments that this startup was breaking the law

It is very fascinating to me still how the threads in HN tend to always reveal a much larger picture than the tone of the original piece. These discussions often have more insight than the articles that everyone is making popular!

gutnor• 11 years ago

Apple can't deploy a questionably-legal music streaming service as easily as a startup can.

There is an illustration of that. Big companies using a lot of contractors normally go through intermediary contractor agencies simply to avoid the risk that the contractor become legally recognized as employee. The cost of those intermediaries can be as much as an extra 20% of the contractor rate - that's significant.

As a small startup, initially Uber could operate directly with contractor driver and save that amount. Now they are a big company and the news in California illustrate the kind of risk the intermediary agencies are shielding big business from.

briandear• 11 years ago

Did Apple 'make' Warner sue anyone? Remember, the labels held most of the cards.. They controlled the content. If Apple had all of this great power over the labels, why did it take so long to get the Beatles? As far as 'more regulation' -- I don't like the idea of the government picking winners and losers. The government uses regulation as a hammer with which to crush companies that don't tie a certain line. Excessive regulation also adds tremendous costs to a company and therefore the consumers. Do you know how big of a legal department is needed just to comply with government regulations? It's a non-trivial cost. I am not saying regulation is bad; I am saying that beyond Sherman, the government ought not be too heavily involved in regulating competition because then only the politically connected or heavy contributors get permission to thrive. Carlos Slim, for example didn't get rich because of a lack of regulation in Mexican telecoms, he became a billionaire because of regulation: Mexico gave him essentially a multi-year head start over potential competitors using regulatory power. The result, Mexican telecom service is highly expensive and of marginal quality. With less regulation other companies could have started offering services sooner and competition would have driven market innovation.

ectoplasm2• 11 years ago

If Apple had all of this great power over the labels, why did it take so long to get the Beatles?

That was a trademark dispute, see Apple vs. Apple.

saiya-jin• 11 years ago

I mean, dude, seriously... what?

by no means I am an apple fan, never owned any of their device (mainly because how they treat their customers, but that's completely different topic) and still living, but - case is clear simple here. Apple paid owners of copyright agreed amount, and startup was stealing this content without anyone's approval. I don't care who gave list to whom, etc. Justice has been done. If you don't like copyright laws, that's again another story altogether. No rocket science...

dangero• 11 years ago

I kept waiting for the payoff, but the article never gave proof that Steve Jobs was behind it. Sounds to me like what happened is that Steve when negotiating with Warner Brothers said something like, "How can you charge us those rates for your music when I have a whole list of places online that have it for free?" At which point Warner said, "We'll take care of those. So the rates can stand."

meeper16• 11 years ago

Fairly clear here: "During one of these breaks I was by myself in the office of the CTO. He came in and we chatted about the state of technology and music. I then thought to ask a question of which the answer would shed light on the real reason behind the litigation and contention technology companies share with old media companies. I asked Howie, why is it that Warner chose to sue SeeqPod? He said that they maintained a short list of companies and we were on top of that list. I then asked how we wound up on the list and at the top. This is when he mentioned that Steve Jobs had held meetings with several labels including Warner and disagreed with streaming music services like SeeqPod and that companies like ours would inhibit a deal between Apple and the labels, so they collectively decided to keep a running list of “problem” companies that need to be “addressed” by Warner. It was at this point I realized we were not in a fight with the labels but in a proxy war waged by Apple against innovative music technology companies."

hamburglar2• 11 years ago

This sounds like the same thing dangero is referring to.

geofft2• 11 years ago

Yeah, you can interpret that the way that dangero did. I think the interesting thing there is that streaming music services of that era (including Internet radio) were generally unlicensed and operating on slightly-questionable interpretations of copyright law that had them paying nothing. So, if Jobs' complaint was that there are these other companies that weren't paying a cent, and could play music anyway (including on Jobs' devices), that would "inhibit a deal" because it wouldn't be rational for Apple to pay either.

Depends, as always, what "innovative" means. Are cities against innovation in transportation? If the innovative thing is ignoring regulations that nobody else has thought to ignore, then yes, of course they are. (As with copyright, it's not obvious that the regulations are good, but they are what's on the books.)

dxhdr• 11 years ago

I read this half asleep and a little inebriated but it seemed to evolve into some kind of bizarre self-aggrandizing pitch on how this Kasian Franks is a super-human with deep hard-to-duplicate knowledge and insights spanning multiple important and lucrative industries. Almost some kind of cred piece bolstered by his proxy encounter with Steve Jobs. Weird.

hamburglar2• 11 years ago

I agree, although I think he sort of predisposed me to this attitude right off the bat with the desperate-seeming link to google results that are supposed to prove people called them an "itunes killer" (note: I could not find a single instance of anyone referring to them as an "itunes killer" in any of those results).

smcgivern• 11 years ago

In fact, the first result (which is duplicated several times) is calling Songbird an 'iTunes killer' - quotes included - and mentions Seeqpod as one of the plugins, saying:

it expands your library exponentially, assuming you’re down with the kind of quasi-legality involved

rimantas3• 11 years ago

Being called "{Apple product there} killer" never turned out to be good for the "killer" involved.

ansible2• 11 years ago

So did SeeqPod have some means by which the artists (cough, excuse me) the labels were getting paid? They said they were paying a lot for bandwidth, so they weren't just a search engine, but also a streaming service?

asadhaider• 11 years ago

I built a third party app using their API, I always wondered the reasons for shutting down the site as it just went down one day with along with its API and a vague message on their homepage.

They had a web crawler indexing all publicly accessible songs or mp3 files which made up their search, the API let you query this database including a cached version of the song hosted on their servers. They weren't just a search engine, my app streamed the cached content as the direct URLs to the public files weren't always that reliable (slow, 404'd).

MrDosu• 11 years ago

So much this!

Haven't read self glorification like this in a long time.

curun1r• 11 years ago

Beyond that, it simply lacks credibility. I can't imagine that a Warner executive would be stupid enough to tell him that Steve Jobs was behind an unresolved lawsuit. It's even somewhat unbelievable that the executive would be allowed to speak to him, in the first place, without counsel being present.

The whole piece feels like it has some ulterior motive and he's taken the facts and added his own narrative rather than the truth. Perhaps he's trying to get a new venture funded and he believes a glorified retelling of his previous startup will help.

Libermentix• 11 years ago

I actually like the second part of the article a lot more intriguing where he talks about his and the company's personal background. It's these stories that inspire to start a company.

npp• 11 years ago

This article reminds me of a lot of what Dalton Caldwell spoke about in his talk about why not to start a music startup at a Startup School in the last several years.

This business seems to have been run and have proceeded horribly, for the exact reasons that Caldwell and everyone else with experience in that area seems to be extremely familiar with.

Is there anything legitimately interesting to the "Apple" and "Steve Jobs" parts of this story other than the usual clickbait?

marrs3• 11 years ago

I found it interesting to see how - if the story is true - your enemies may not be who they appear to be. He thought the labels hated his business whereas they may have actually been quite partial to it in slightly different circumstances. That's useful to know for when your circumstances change.

brianmcconnell• 11 years ago

TL;DR Music technology startups suck.

danieltillett2• 11 years ago

This is not a very HN comment even if true.

sjwright• 11 years ago

Silicon Valley s1 e4:

  So Pied Piper, drop it on me. What is it?

  Well, we started off as a music app.

  Yuck.

  Yeah. Gross. Ugh.

kowdermeister• 11 years ago

It's a brianmcconnell comment. Why should anybody act like a hive mind? His comment is quite true. I been there, done that.

jevgeni8• 11 years ago

Whoever uses "analyzation" publicly deserves to have a failed start up.

billpg• 11 years ago

I'd feel smug about my choice of cell phone but Samsung sponsored the Olympics.

amelius2• 11 years ago

Hint: when you start a service solving a very generic problem, you have a big chance of being outmaneuvered by a competitor.

morganvachon• 11 years ago

He touches on that when he goes into his background. He worked on a project in the mid 90s that was duplicated by a competitor and sold to Yahoo.

"I then moved to Sun Micro-Electronics (SME) and that’s where I learned one of my most valuable lessons. I began to build and ship the first HTTP-based (yes, this was a thing back then) stock ticker and called it DigitalTrader in 1996 (http://goo.gl/dQzPTC) It was built in Tcl/Tk and Java/Tk. It auto-updated itself and crawled Quote.com and Yahoo for data. Six months later a competitor duplicated it and Yahoo bought them and put us out of business overnight. Lesson learned: realize when you are doing something that is easily duplicated. "

amelius2• 11 years ago

This is something else. A ticker tape is a niche product (not what I would call "generic"). Also, the lesson learned is about something which is easily duplicated, and this does not have to apply (in general) to a generic product.

musesum• 11 years ago

I saw Kasian Franks speak at a meetup in Oct 2007. A friend suggested that I check out SeeqPod since I had worked at an earlier music streaming startup. As I recall, he made a negative comment about the labels, near the end. His position seemed precarious. Warner sued a couple months later.

tantalor• 11 years ago

Can somebody with background on the law please explain how this is or isn't an anti-competitive practice? i.e., Warner Bros sues Apple's rival at Apple's request.

InfiniteEntropy• 11 years ago

Because in America its only anti-competitive if you can't pay off the people who decide if it is.

s73v3r2• 11 years ago

Care to point out where this guy's startup was paying royalties for the music streamed?

lnanek2• 11 years ago

Well, reading the article, this guy had an illegal business finding illegal music on the internet for people to play for free they didn't have rights to. A label sued him. The end.

Apple doesn't have much to do with it. They had a legal music business and negotiated to pay the labels, as they should, since the labels own the music rights. They and the labels correctly figured out their competitors were illegal, and they sued.

Should you not be able to sue someone doing something illegal just because they are in the same business as you?

s73v3r2• 11 years ago

For one, there's no actual evidence that actually happened.

guelo• 11 years ago

They were crawling the web for mp3s the same way that Google does. Though admittedly Google hides the mp3s much better nowadays then they used to. And the web is way more balkanized into all these corporate walled gardens so there are fewer free roaming mp3s on random websites as there used to be. But technically it was a search engine the same as Google.

It always bothers me that this area of the law seems to be entirely based on judges' interpretation of the purpose of a UI. A UI is illegal if it guides the user towards the illegal action. If it is possible to perform the illegal action but the user has to put in a little thought into how to accomplish it then the UI is legal. Google can't have a file-type search box with an mp3 option but if users know the right incantation they can achieve the same thing. So we have lawyers telling us how we can build UIs. It seems wrong and like a dangerous slippery slope.

mbrownnyc• 11 years ago

Interesting point! Worth noting that I do think that this is what lawyers _really_ do. They smudge the gray area to their will, and with enough effort, they make some sort of progress towards their client's bidding. Worth noting, even with the existence of Tomahawk and youtube... and napalm indexer, soulseek, and torrentz.eu, I still felt that it was much easier to pay for Spotify than to drill through the tendrils of the Internet. I had time when I was a poor college student/post-college "adult," but I figured semi-efficiently pirating music for 20 years (yes on a 56k modem as well), I'd rather just popcorntime it and go. Where is the popcorntime for music anyway? Does Tomahawk count at this?

notahacker• 11 years ago

I was under the impression that the UI was pretty incidental in most judges' interpretations that platforms used mainly to locate copyrighted material were on shakier ground than platforms which incidentally, and despite ostensibly significant efforts on the part of developers to limit it, could be used to locate copyright material. It's not like Google doesn't get hit by content-provider lawsuits either, it's just that they're big enough to usually get a settlement agreed on favourable terms and far too big to be bankrupted by legal costs, which is a wider and more general problem with litigation.

Ironically I'm writing this listening to YouTube streaming in the background: a far superior free way to locate and listen to music without paying for it than most of the early pirate platforms ever could have hoped to be.

Lawtonfogle3• 11 years ago

Do judges count how it is intended to be used? If we are counting only use and not intended use, then this just means that if a bunch of pirates (or worse) are your initial users then you are in the wrong. That sounds absurd (though I could see a lot of people, in tech and otherwise, wanting to make Tor illegal because of one of its predominant uses). But if it is based on intention, it still doesn't differentiate between the technology being intended for legal use that may not different from illegal use, which is no less absurd. Consider a tool that allows pushing apps onto phones. It is intended primarily to allow apps to be pushed, but the tool has no way to check if the user pushing the app onto the phone has the legal right to push the app and the legal right to push software onto the phone in question.

It seems that making this a legal minefield that requires an existing well funded legal department is nothing short of regulatory capture.

gcb0• 11 years ago

that's the thing with judges and jury. (despite what TV show with precedence and such)

nobody knows!

so the law is only slightly just for whoever has the money to keep appealing decisions until they find one they like (and the opponent is out of money to appeal further).

kenrikm• 11 years ago

When people think of "copyrighted" material they usually think Songs, Movies etc. However if you stop and think about it most content on the web is copyrighted, from the news articles you search for to images and websites themselves. With that in mind Google also is used "mainly to locate copyrighted material"

ebbv• 11 years ago

It's the difference between a phone book and a list of phone numbers of meth dealers.

They knew what they were doing was in at best in a legal grey area, and they were making themselves targets. Steve Jobs may or may not (this is second hand hearsay) have been the one to point them out to Warner, but ultimately they made themselves a target and it's not Steve Jobs fault that they failed.

Also, blaming someone who's dead for your company failing and then spending the rest of the post with ridiculous self-aggrandizement shows a serious lack of character, IMHO.

rayiner3• 11 years ago

The UI bit is a red herring. The question is the developers' motivation and what actions they encourage a user to take. Design of the UI may be one piece of evidence of that motivation among others.

Lawtonfogle3• 11 years ago

Even if you can show the intention of the developer was to aid the user in taking a certain action, if that action can be legal in some cases, how can that be held against the developer?

Is a gun scope illegal because it helps a shooter hit their targets where sometimes shooting those targets is an illegal action? Should torrenting be banned because it is often used to transfer illegal files even though there are a lot of legal files in use as well?

72deluxe2• 11 years ago

" If I could compile and debug kernel issues along with X11 X86Config files with assistance from a good friend at the QNX-based Caprica Internet in LA and the 2-person Slackware “helpdesk” on the East Coast every few days then I’d be able to continue to test NCSA webserver over SLIP and PPP to deliver electronic faxes with a web interface for the Mosaic Browser for a sugar company in Marin County to save them a few thousand a month in fax fees to China. "

How does one "debug" X11 config files? I had to do that when it hated my monitor and rubbish graphics card but that sentence appears like complete and utter rubbish.

EDIT: For clarification for those disposed to downvote, looking through an XF86 config file is not rocket science.

IshKebab2• 11 years ago

Maybe modern Xorg config files are not rocket science, but surely you remember the days of manually listing video modes, and trying endless combinations of video drivers. Hell I think you even needed to add special directives to get three button mice to work properly.

Fortunately those days are gone, but you definitely could debug xf86 config files.

JustSomeNobody2• 11 years ago

It wasn't so much debugging as it was laying our your video card and monitor manual, listing the config file and making sure all the little numbers match up.

72deluxe2• 11 years ago

Yes I do remember those days. And running XF86Configurator (or whatever the tool was) to try and guess a sensible setup. Guessing the modes for CRTs when it didn't work was a headache. Listening to your monitor going WHEEEEEEEEEEE and screaming in the wrong mode whilst hammering Ctrl-Alt-Backspace to exit before it blew up in your face.

But that article seems to be a strange mismash of odd name-dropping and a list of personal achievements.

JustSomeNobody2• 11 years ago

"We had 50M monthly active users and 250M searches every month. Steve Jobs told the labels, including Warner Music, to sue us. So they did and for $40B. How do I know? I know because Steve Jobs gave them a list of music streaming sites that were competitive threats to iTunes, and told them to take care of it."

Citation needed. Or did I miss it amongst the self-aggrandizing?

agentultra• 11 years ago

He named an engineer at Warner Music as his source.

jasonlotito• 11 years ago

The "engineer" being Howie Singer, the CTO of Warner Music.

milesskorpen• 11 years ago

". I also spent time through the years developing algorithms and predictive analytics associated to uncovering patterns in historical stock market data. "

A bizarre comment — did he expect to see it coming? How does this relate to the story at hand? "Somehow, even someone as sophisticated as me, didn't see the downturn coming" ... if he could predict any kind of change in the stock industry better than investing professionals he wouldn't be running a questionably-legal streaming startup.

TheCowboy• 11 years ago

He's expressing that he didn't see it coming:

  Even with this knowledge base I failed to pay attention to what I knew was a deep systematic fissure in the financial markets signaled by the fall of Bear Stearns. I was focused on user acquisition, growth and resolving litigation as opposed to revenue, a mistake when the Black Swan appears.

He's not claiming to have the ability to time markets perfectly. He had enough experience where he might have some awareness of the bigger economic and financial picture. He's saying that even people in the financial industry were caught off guard, especially investing professionals who are key to keeping startups funded.

I found this context to be the most interesting part in addition to the role of how companies behaved in an oligopolistic way.

It could also be taken as an argument for greater financial transparency, or recognizing that the stability of the financial sector is another risk to startups and innovation.

nsgi• 11 years ago

It doesn't seem to say whether he had any further success with that approach, other than predicting one event which may have been a coincidence.

lectrick• 11 years ago

So they intelligently crawled the web for music files to download which were... not purchased.

The reason why they failed is because they, like many others, were "nebulously/quasi legal." (You know what was ALSO awesome yet not legal or respectful of creator pay? https://en.wikipedia.org/wiki/Audiogalaxy .) At least Apple was trying to make it all legit. They did start with DRM (note: no longer the case for years) but this was to make the record companies more comfortable with it.

The reason why SeeqPod was sued is because Warner Music (and others) had a case. It was not a purely frivolous, harassing lawsuit.

phkahler• 11 years ago

Being a search engine for independents seems like a good idea. It's another area where eliminating anonymity can help. The problem for someone in that business is people putting stuff they don't own into the system and getting them sued. By making people more accountable that problem should go away.

People on the web today are not really anonymous and not really identifiable either. I think we need to fix both of those problems.

How Apple Influenced The Labels To Shut Down My Music Streaming Startup

Related Stories