While those who negotiate and make deals in the music industry may be doing a little dance about Apple’s reported official entry as early as today into broadcast streaming, the future appears to be dim for online hosting services such as Rapidshare, which are struggling to find the same success hosting legal versus unlicensed music and other materials.
Recent judicial action to deter companies from facilitating illegal music downloads has caused Rapidshare to focus on preventing illicit use of its services. A court order against Newzbin1, a hosting service, requiring internet service providers to block the site in Britain and the seizing and shutdown of MegaUpload hosting service sites may have been catalysts for Rapidshare’s change.
But even as anti-piracy crackdowns continue, with litigation and regulatory enforcement, the music industry also is expanding its efforts to boost by every means the legal, licensed consumption of its creative product, particularly in the burgeoning area of internet radio and streaming broadcasts, where providers like Pandora and Spotify now will see the jolt of a market-mover like Apple enter the field.
Rapidshare once was considered to be the world’s most popular one-click hosting service, ranked the 50th most popular website and reported to have hundreds of millions of visitors a month, as users flocked to the website as an alternative for music file sharing. Now it has been forced to lay off 75 percent of its employees to cut costs, due to the dramatic drop in its web traffic. The company saw its usage plummet after it made concerted efforts to stop illegal use of its service by discontinuing its rewards program for users, encouraged users to get registered accounts and limited bandwidth to 30MB a day.
The Swiss-based company also has fought court battles with GEMA, the German performance-rights organization. It accused Rapidshare of unlawful use of copyright-protected works of its members. And in 2009, the company may have also its customers by providing major record labels with personal details of those who uploaded copyright-protected files when a Metallica, pre-release copy of its Death Magnet album was leaked. After all its legal tumult, the company is reportedly focusing more on B2B cloud storage services, in which it sells personal file-storage and backup solutions to consumers, as the record industry continues its wars on piracy.
As BPI, the British record label trade organization, prepares a domain-blocking blitz on up to 25 domains that provide unlicensed material, Rapidshare will evade this punitive action due to its preventive measures. But only time will tell if it can climb back up in the ranking of the world’s most popular sites.