CANNES, France -- Claiming 1 million U.S. users of its cloud-based music locker streaming service, mSpot unveiled an expansion into Europe at the MIDEM conference. But CEO Daren Tsui found himself on the defensive while on a panel discussing cloud music later in the day, taking hits for not striking deals with the major labels.
MSpot's service lets users upload 2GB worth of tracks to an online locker for free, from which they can then stream to any mobile phone with the mSpot app downloaded to it. In the United States, users can opt to pay $4 a month more to upload up to 40GB. The European service for now is only offering the free tier.
MSpot has been offering this service since June, and has racked up 1 million downloads and 750,000 registered accounts. But that's not mSpot's main concern. It's statements like this, from Sony Music president of global digital business for U.S. sales and corporate strategy Thomas Hesse:
"We are very uncomfortable with a model where you can just throw anything into the cloud and stream it, if what you threw into the cloud was not legitimately purchased," he told the panel, on which Tsui also participated. "It's not the right thing to do to launch a service under these kinds of shady legal situations. We will do everything in our power to enforce our rights in those kinds of situation."
And fellow panelist Harry Maloney, CEO of Catch Media heaped it on. "It concerns me that you can sit here and say that you are not licensed and you can take money from a music lover while there are artists and producers here who are not getting compensated," he said. "Mspot should have taken the time and resources to get licenses."
Tsui responded defiantly, if diplomatically with, "It's not our job to police how they get their music."
Now just because Hesse made these comments doesn't mean that mSpot is in immediate trouble. It just means Hesse doesn't like it. But the unspoken reality is that neither he nor Tsui have any idea what the legal precedent is, because there isn't one. Other major label executives with the same level of responsibility as Hesse say they're not clear on whether they can force services to get licenses for letting users upload their own music.
Hesse firmly said he prefers the "scan and match" model, which means that a locker service would scan the metadata of a user's music library stored on the hard drive and let users then stream only those songs from an online server. This allows the service provider to store just one copy of each song in the cloud, rather than a copy of the same song for each user. The reason Hesse likes this model is because it very clearly does require a license to stream that file.
The debate was a welcome change to what had been an otherwise tame panel involving the usual platitudes of how streaming services are the future -- something that had been a theme all day without any real discussion about how exactly that were to be achieved. While certainly an en vogue model within the confines of industry events like this, there's no indication it has in any way caught on with music fans, as indicated by the failure of such services as Comes With Music and the continuing customer adoption and retention challenges experienced by other subscription music services.