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Tiscali's Jukebox Forced Offline
By: MarkJ - 07 June, 2006 (12:54 PM)

ISP Tiscali has been forced to switch off its recently launched online music (Jukebox) service following pressure from the European recording industry. The provider has reacted angrily and in response issued the following open letter:

Dear Sirs,

It is with great regret that today we find ourselves forced to "turn off" our Tiscali Juke Box service, launched recently on 26 April 2006 in Italy and the UK.
When we launched Tiscali Juke Box our objective was to offer users the chance to legally listen to millions of songs through p2p streaming, selecting them by artist, genre, or simply by choosing predefined playlists made available by other users. This service was developed on Mercora's platform which, for over a year, has been enormously successful in offering users the possibility to listen legally in the United States.

The service has now been judged by the major recording labels in Europe to be "too interactive" only because it allows users of the Internet (the most interactive of mediums) to carry out searches by "artist" in addition to genre.

It should be explained to the readers that online music rights are subdivided into two main categories: "non interactive rights", which can be negotiated with the collecting societies, and "interactive rights" which must be negotiated with the individual recording labels.

After signing an experimental one-year Webcasting agreement based on the management of non-interactive rights, today, Tiscali has received a request by the recording labels to modify the service by eliminating the search by artist mode or, alternatively, to negotiate the so called interactive rights with the individual recording labels.

All this goes clearly against the spirit of our initiative which was to ensure that Tiscali is always at the frontline in promoting the legal online distribution and sale of music. Tiscali Juke Box represented an additional important step in our own policy to encourage the legal purchase of music through the Internet and the service proved extremely effective in achieving this as, since its launch, legal download sales of music through the Tiscali Music Club (integrated with the Tiscali Juke Box streaming service) recorded an increase of approximately 30%.

It is surprising that after just one month, despite the joint regular testing and fine-tuning phase carried out prior to the launch of the service, the major labels have decided to submit unexpected change requests. Even more surprising is the short-sightedness of the recording industry in not making any effort to understand either the basic needs or habits of music fans that choose to consume music via the Internet, or the acts directly benefiting from this promotion.

In fact, a search tool without the function to identify songs at least by "genre" and "artist", if not by single title, is hardly useful to an Internet user. Clearly the major labels don't understand the business potential of a service like Tiscali Juke Box which, by acknowledging and paying the rights for all songs being listened to in streaming mode, safeguards the rights of the industry and the artists.

This is even more serious if one considers the fact that the same service with all the same functions disputed here, is being offered by Mercora in the United States and Canada, where it is deemed perfectly legal. We cannot ignore that the objections presented to Tiscali at this time represent, on the part of the recording industry, a clear attempt to discriminate between American and European music fans and Internet users.

Faced with this total lack of understanding and despite having put our best efforts into developing and testing the service in full transparency and cooperation with the recording industry, Tiscali today finds itself being forced to turn it off.

It is important to underline that this affair not only has an impact on Tiscali Juke Box but on the entire market for the legal online distribution of music. The industry's conservative attitude makes any collaboration for the promotion and marketing of any type of legal, innovative service very difficult. It is unfortunate that once again the industry has demonstrated the complete rejection of online legal music based on open systems, and is to the full advantage of the proliferation of music piracy services.

We take note of this with enormous regret and only hope that this episode will serve to inspire further debate and thought.

Mario Mariani
SVP Media & VAS
Tiscali Services Srl

Tiscali hopes to resolve the issue and find a way of brining the service back to life, yet it's too early to say whether their attempts will bare fruit.

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