No different to starting a company that lets people get cheaper rides while avoiding taxi restrictions or one that lets you find cheaper places to stay by avoiding hotel and zoning laws.
A lot of successful startups and internet businesses are done on a 'break an awkward law first, ask for permission later' kind of way. There's a reason a common startup mantra is 'it's better to beg for forgiveness rather than ask permission'.
And yes, YouTube is another obvious example here. Wouldn't have been anywhere near as popular if it was so strict on copyright right from the start.
I think republishing someone else's work without permission them is morally wrong, but offering a taxi ride is only wrong insofar as it is illegal. One is a good law protecting content creators, the other is crony capitalism. So I think there is a difference.
The taxi market differs between countries, but in those markets where the regulations are there to protect the riders and drivers, ie minimum wages, proper tax handling, health insurance, passenger's insurance, etc, Uber is morality wrong in just the same way.
It's hard to bootstrap some models without a lot of money. Even with money, it's not obvious there is a market until people prove it via piracy.
For example, Crunchyroll is the least terrible anime streaming site and they got started by stealing anime that was "stolen" by folks that wanted to put decent subtitles on shows from Japan.
They eventually hired some of the folks they were stealing subtitles from, and got licensing deals from the content owners once they had revenue. But they never would have been able to negotiate a deal if they'd have asked for permission instead of forgiveness.
It's entirely possible to imagine that another streaming company (Netflix, Hulu) would have looked at all of the great quality subtitles being produced by non-content owners and figured out that there was revenue to be had. But I fail to see how they would have seen the demand if people hadn't been stealing and making good subtitles to begin with, and producing huge numbers of stolen downloads/streams.
I guess a lot could be said these days about the profitability and future prospects of Spotify, but their music catalogue in the early days beta was at least partially sourced from Piratebay and other torrent sites. [1]
Considering the deals they later made with the record companies, it does indeed seem like asking for forgiveness rather than permission could be the best strategy, as was noted by some of the comments in this thread.
Negotiating with the record labels from the get-go before even having a popular site sounds like it would have never resulted in a profitable company. The record labels don't give two shits about whether their licensing deals are equitable. They likely would have tried to gouge the small startup, possibly preventing it from ever growing.
>I feel like starting a business with a massive theft of other people's intellectual property isn't a great model to follow.
This is the basis of essentially every single huge successful consumer application/website over the past decade. There's really only 3 ways to make money on the internet it seems. IP theft, advertisement, and selling physical goods.
Well back in 2004 there was no way to get an actual license. Most lyrics sites claimed to be safe under DMCA or "Educational Use".
Only up until the publishers stood up for themselves, the industry shifted slowly.
It sounds like all the competitors were in the same boat at the time. Likely the issue is that no one had a license to the lyrics and the ever slow to catch up record labels weren't doing it either. So it created this space that asked for filling, even if illegally.
Serious question: is this theft of IP? I know if a songwriter writes a song, you need to license it in order to perform it for profit, but are the actual lyrics intellectual property?
"The copyright law of the United States provides for copyright protection in
“musical works, including any accompanying words,” that are fixed in some tangible
medium of expression. 17 U.S.C. §102(a)(2). Musical works include both
original compositions and original arrangements or other new versions of earlier
compositions to which new copyrightable authorship has been added.
"The owner of copyright in a work has the exclusive right to make copies, to
prepare derivative works, to sell or distribute copies, and to perform the work
publicly. Anyone else wishing to use the work in these ways must have the permission
of the author or someone who has derived rights through the author.
note: Copyright in a musical work includes the right to make and distribute the
first sound recording. Although others are permitted to make subsequent sound
recordings, they must compensate the copyright owner of the musical work under
the compulsory licensing provision of the law (17 U.S.C. §115). For more information,
see Circular 73, Compulsory License for Making and Distributing Phonorecords.
"Copyright Protection Is Automatic
"Under the present copyright law, which became effective January 1, 1978, a work
is automatically protected by copyright when it is created. A work is created
when it is “fixed” or embodied in a copy or phonorecord for the first time.
Neither registration in the Copyright Office nor publication is required for
copyright protection under the law.
Lyrics are copyrighted. Musical scores may be separately copyrighted. Individual performances or recordings of music and lyrics together may also be separately copyrighted.
Typically, the latter is pursued by recording companies, because that is the IP they own or exclusively license. The rest is rarely handled by the individual rights-holders, as they usually just let ASCAP or a similar organization handle the business and litigation end, and just cash the royalty checks.
Licensing the lyrics should be a whole lot cheaper than the music or a specific recording. So it would not cost a lyrics site as much to be fully legit as it would for a music streaming site. Likewise, it may cost less to license a cover band to perform something than to license the recording made of it by a famous group, if the song was not actually written by them. This is why ABC's Dancing With the Stars uses so many covers, but obviously still uses recognizable recordings where Disney already has or can cheaply obtain a performance license.
> Likewise, it may cost less to license a cover band to perform something than to license the recording made of it by a famous group, if the song was not actually written by them.
You could even pay the original artist to perform it. The recording is what's licensed, not all performances by that artist. On Spotify I've seen quite a few older artists re-recording their old hits, presumably because they get more money if they themselves own the license to their own cover.
That makes sense, I didn't think of it like that. I was thinking that since the value is in the performance, that that's where the protection would be.
Most very successful businesses are government monopolies or oligopolies, and are the result of the state continuously interfering on their behalf over a period of decades or more. Sometimes multiple times. At least here in France.
The really big companies are France Telecom/Orange, GDF/Suez, Total, BNP Paribas, Sanofi, EDF and Societe Generale, maybe Renault. All fit this pattern. None are the result of innovation, the closest would be Sanofi and Renault up until WW1.
I have not yet been to another country where it was different.
A lot of successful startups and internet businesses are done on a 'break an awkward law first, ask for permission later' kind of way. There's a reason a common startup mantra is 'it's better to beg for forgiveness rather than ask permission'.
And yes, YouTube is another obvious example here. Wouldn't have been anywhere near as popular if it was so strict on copyright right from the start.