An executive of the Russian song-downloading Web site AllofMP3.com insists his site is legal, despite admitting it has never paid royalties from sales directly to artists.
Instead, it has paid 15 percent of its song revenues to the Russian Multimedia and Internet Society (ROMS), but British and American record labels have refused to accept the money, said Vadim Mamotin, director general of Mediaservices Inc., the parent company of AllofMP3.com.
Mamotin made those claims through a translator during a press conference Tuesday. His answers to journalists' questions were posted on the company's Web site.
AllofMP3.com is defending itself against music piracy lawsuits by record industry groups including the British Phonographic Industry and similar charges by music labels Universal Music Group, Warner Music Inc., SonyBMG Music Entertainment and EMI Group PLC.
"What more is AllofMP3 [to] do?" Mamotin said. "We operate under Russian law, we pay taxes in Russia and we pay royalties to ROMS, the official licensing agent in Russia. ROMS has offered to pay the record companies the royalties they collected but been rebuffed. Clearly, the record industry is trying to gain additional leverage before entering into direct negotiations with either us or ROMS."
Disgruntled artists are free to ask ROMS to remove their songs from AllofMP3.com, but only a few have done so, he said.
An umbrella group of record labels disputed that point, according to a statement by the International Federation of the Phonographic Industry (IFPI): "Copyright societies representing hundreds of thousands of composers, authors and music publishers around the world have written to ROMS making it plain that ROMS has received no such rights from them. ROMS does not have the mandate from any of the relevant copyright owners."
International courts are now weighing the debate, said Alex Jacob, an IFPI spokesman in London. "We believe they are illegal in Russia and outside. There are two court cases in Russia right now being brought by the prosecutor. There is an injunction against them in Germany and the Italian site [allofmp3.it] has been taken down. Our view is that they are illegal," Jacob said.
In response to being charged with running a pirate Web site, Mamotin insisted that AllofMP3 was a better safeguard of artists' interests than commercial record companies.
"Let's start with the fact that the record companies have little regard for the majority of musicians. They are concerned with making money for themselves, not the artists. In our opinion, we and the artists would be better off dealing directly with each other," Mamotin said.
He did not explain why artists would choose to draw their 15 percent royalties on AllofMP3's low prices. The site charges US$2.69 for Justin Timberlake's album "Future Sex/Love Sounds," far less than the $13.99 charged by some U.S. retail sites.
Rather, it is the record companies who are starving their artists, resulting in a recent lawsuit by the band Cheap Trick against SonyBMG for shortchanging them on royalties due from sales on iTunes, he said.
"It is not up to us to determine value. We price our music based on the Russian market. To us, who love music, all music is priceless," Mamotin said.