The Real Reason Why Megaupload Was Shut Down

Smells like An Organized Set Up



Dopedy Dope Concept

Aha aha, my sense of smell was not deceiving me when i suspected a rotten plot somewhere in between the lines.
Last Thursday the US Justice Department came down hard on Megaupload and its mega founder, Kim Dotcom. In the days since, there has been a shake-up of sorts in the digital storage realm. Several smaller sites have drastically changed their business models. Others, like MediaFire, reached out to me after I published this post attempting to distance themselves from Megaupload.
However, yesterday, a new theory surfaced that indicates Megaupload’s demise had less to do with piracy than previously thought. This theory stems from a 2011 article detailing Megaupload’s upcoming Megabox music store and DIY artist distribution service that would have completely disrupted the music industry. TorrentFreak first reported about the service in early December 2011. Megabox was just in beta at that time with listed partners of 7digital, Gracenote, Rovi, and Amazon. Megaupload was in a heated marketing battle with the RIAA and MPAA who featured Kim Dotcom in an anti-piracy movie (5:10 mark). The site had just sued Universal Music Group for wrongly blocking Megaupload’s recent star-studded YouTube campaign. Things were getting vicious in December but the quiet launch of Megabox might have been the straw that broke the millionaire’s back.

Dotcom described Megabox as Megaupload’s iTunes competitor, which would even eventually offer free premium movies via Megamovie, a site set to launch in 2012. This service would take Megaupload from being just a digital locker site to a full-fledged player in the digital content game.
The kicker was Megabox would cater to unsigned artists and allow anyone to sell their creations while allowing the artist to retain 90% of the earnings. Or, artists could even giveaway their songs and would be paid through a service called Megakey. “Yes that’s right, we will pay artists even for free downloads. The Megakey business model has been tested with over a million users and it works,” Kim Dotcom told TorrentFreak in December. Megabox was planning on bypassing the labels, RIAA, and the entire music establishment.
Megaupload was likely large enough to actually find success. Other services have tried what Megabox was set to do, but Megaupload was massive. Prior to its closure last week, the site was estimated to be the 13th most visited site on the Internet, accounting for 4% of all worldwide Internet traffic. It boasted 180 million registered users with over 50 million visiting the site daily. Megaupload was already a seemingly trusted service for artists to distribute their work. Megabox would have a monetized that popularity by passing on the bulk of the earnings back to the artists.
“You can expect several Megabox announcements next year including exclusive deals with artists who are eager to depart from outdated business models,” said Dotcom late last year. But that’s probably not going to happen. Kim Dotcom and several other Megaupload executives are now awaiting trial on various charges including racketeering, money laundering, and various counts of piracy. It seems they flew too close to the sun. High on success and a half a world away in New Zealand and Hong Kong, they attempted to take on the music industry head-on. Now they’re in jail.


damn, talk about the Devil  (Music Industry) Wears Prada *SMH*

Peeped over at TechCrunch

Megaupload gets shutdown.....

So apparently the sites that millions have used to download a variety of files has been shutdown by the U.S. government. This has sent ripples of worry days after a majority of the internet protested the proposed SOPA and PIPA bills. Here's the article below

The Justice Department’s shutdown of the popular file-sharing site Mega­upload.com reverberated across the Internet on Friday, sparking fresh questions for major Web companies while rattling millions of users of sites like it.
Although federal authorities said Megaupload.com was part of an international criminal ring, the practice of providing digital “lockers” so people can store and share their photos, movies, songs and the rest of their digital lives is very common. Sites such as Facebook, Dropbox, YouTube and YouSendIt can be used to swap both legitimate and pirated content.

Sites they claim to have breached: A day after many Web sites participated in a protest against the SOPA anti-piracy bill, the Justice Department announced it was shutting down file-sharing site Megaupload.com over piracy violations. Soon after, Anonymous took credit for shutting down the federal agency’s Web site. Here’s a look at other cyberattacks the informal hacking group has claimed credit for.

 

Megaupload allegedly took the practice to a new level of criminality. Federal prosecutors said the firm paid users to upload illegal movies and music and tried to hide the practice. The investigators said its executives used their ill-gotten gain for a lavish lifestyle, adding that they confiscated dozens of luxury autos, including a Rolls-Royce with the plate “GOD” owned by site founder Kim Schmitz, who also goes by the name Kim Dotcom.
The indictment charges Megaupload’s executives with making $175 million from charging users subscription fees and advertisements while robbing movie producers, authors, musicians and other copyright holders of about $500 million.
A lawyer for Megaupload.com has denied that the company did anything wrong. But on Twitter, an account apparently run by the firm’s executives sent out a farewell tweet: “Sorry guys, it was good while it lasted!”
For other Web companies, the controversy may only be beginning.
The FBI’s action raises many questions about who oversees copyright on the Web and how far the government can go. Web organizations questioned whether the government has the right to shut sites down for hosting pirated content, as it did in the case of Megaupload, without allowing companies to defend themselves in court first.
“They will wonder if they have done anything different from Megaupload, and does that mean the Feds will come through their door,” said Eric Goldman, a professor of intellectual property law at Santa Clara University.
“Keep in mind the DOJ’s indictment is actually a sales document; it is their interpretation of things, and they are throwing spaghetti on the wall with their claims and seeing what will stick,” Goldman said.
Many Web firms such as YouTube have pledged to respect copyright laws, but users still post pirated material on their sites, triggering legal battles between media companies and Silicon Valley.
Even before it was shut down, Mega­upload had its legal troubles. It was in a fight with Universal Music because celebrity artists such as Jamie Smith, Kanye West, P. Diddy and Will.i.am endorsed the Web site. Some of those musicians had close connections to a leader of Mega­upload, Swizz Beatz, and his wife, Alicia Keys.
Web companies are also tangling with powerful lobbyists who represent Hollywood and other traditional media companies.
On Friday, lawmakers delayed action on legislation that would have given law enforcement more power to shut Web sites down. Leading Internet firms had used their most prominent sites to protest the bills.
But advocates for the measures signaled that they were far from giving up on the fight.
Former Connecticut senator Christopher J. Dodd, now head of the Motion Picture Association of America, made a candid rebuke of the lawmakers that his industry financially supports.
“Those who count on Hollywood for support need to understand this industry is watching very carefully,” Dodd said in a Fox News interview Friday. “Don’t ask me to write a check for you when you think your job is at risk and then don’t pay attention to me when my job is at risk.”
While acknowledging the problem of pirated content, companies say that the ability to freely share ideas and content over the Web is critical for the future of the Internet. Some said that legitimate uses of locker sites and social networks will be disrupted as Washington clamps down on piracy.
A question for ordinary users is what happens to their content if authorities shut a site down.
Charles Alexander, a digital-music consultant in Nashville, said he regularly relies on similar storage services, such as Dropbox and YouSendIt, to transfer music files between clients and customers.
Last month, he sent a high-resolution music clip to a music director to use in an online soap-opera series. Too big to send via e-mail, Alexander has relied on cloud-based services — sites that let people store information on the Web and access that content while on the go.
He also regularly sends videos of his 8-year-old daughter to his mother in Malaysia through the locker services.
“The Web provides so many opportunities for discovery and sharing of music,” Alexander said. “If the FBI can seize Megaupload, they can seize any foreign-based service, and we have to be careful what kinds of information we are giving up.”

Peeped over at washingtonpost.com