Audiogalaxy Returns; Choruss File Sharing Plans Falter

Music sharing pioneer Audiogalaxy returned this week, albeit without any file swapping functionality. The former Napster competitor  — shut down by the music industry in 2002 — now enables users to stream their personal music library to their iPhone (s aapl) or Android (s goog) handset.

The latest beta of Audiogalaxy's file sharing service never launched.

It’s a neat product, but not exactly what Audiogalaxy founder Michael Merhej had in mind when he quit his job at Microsoft (s MSFT) in 2007 to rebuild the Audiogalaxy sharing service. Merhej partnered with Jim Griffin of the Warner Music-backed Choruss project (s wmg) to power the industry’s first legal file-sharing offering. Griffin and Merhej envisioned a service much like the old Audiogalaxy, offering access to pop hits as well as obscure cover versions of any song you can think of recorded in someone’s garage. Users would pay a flat monthly subscription fee and distribute this money amongst rights holders. Merhej even built a new Audiogalaxy website that promised the launch of a legal service at campuses this fall.

That beta site has since been taken offline, and Merhej acknowledged this week in a blog post that licensed file sharing isn’t likely to materialize any time soon. “Unfortunately, nobody can offer this experience today because it is next to impossible in the current copyright environment,” he wrote.

I got in touch with Jim Griffin to get an update on Choruss, and he said the project is effectively on hiatus. “My fault; I blew it,” he told me, saying he’d underestimated the complexities of pulling off a legal file-sharing service.

Choruss was backed by Warner Music and reportedly able to secure support from two other major labels. However, a licensed file-sharing service would need each and every songwriter to sign on, because its not a product that’s for sale, but a service with a revenue-sharing agreement. That’s where Choruss’ trouble started. “We couldn’t even find half of the rights holders,” said Griffin. Without locating these rights holders, it was impossible to secure the necessary licenses. That meant half of the songs shared through Choruss could have potentially resulted in copyright lawsuits, both against file sharers and operators of the system, with statutory damages of up to $150,000 per song: a risk no one involved was willing to take.

Griffin is still pursuing the idea of licensed file sharing, but he has changed some of his core assumptions on the set-up of such a service. Choruss tried to obtain all its licenses through market-based negotiations. Griffin now thinks that the legislature needs to step in. “There needs to be a compulsory or statutory licensing environment,” he said, explaining that it’s simply impossible to negotiate with each and every rights holder individually.

Another essential piece of the puzzle is a registry for copyrighted works that would make it easier to locate and eventually compensate rights holders: a project that Griffin and his company Onehouse LLC are concentrating on now. He’s envisioning a database that works much like the DNS system, with information contributed from rights holders worldwide. It wouldn’t do much good to have a statutory license for Audiogalaxy and similar services without such a database, he argued.

Griffin told me that implementing such a database correctly would take at least three years. So when will we be able to use a legal file-sharing service that offers access to any song we can think of while compensating rights holders? “I think it’s gonna take the rest of my lifetime just to get this right,” Griffin told me. However, the fact that there was plenty of interest for such a service amongst students and universities keeps him going, and he still believes that monetizing file sharing is inevitable.

That belief is shared by Michael Merhej, who wrote this week: “We can’t offer this kind of music experience today, but when the time is right, Audiogalaxy will be ready.”

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