Muxtape - deflecting the inevitable?

A few people have been talking up www.muxtape.com recently. My co-worker, Tyler, is always on the site.

The more I play with it the more I wonder - how is it legal?

Muxtape relies on people uploading mp3's to create a mixtape ... mp3's they generally (in most cases) wouldn't have the legal right to distribute (regardless of the fact you can only stream on muxtape, not download)

And we all know the music industry isn't the most digital friendly or literate ... and generally wheels out the cease and desist treatment to anyone doing anything online they don't understand.

Muxtape does a few things well. It's simple (too simple perhaps), and taps into the want of the hipster to create mixtapes that show off their musical depth. Yes, it has been done before ... Muxtape is just timed nicely. It also doesn't have to deal with the legal issues sites like imeem, last fm etc who have to be a little more conscientious/aware of the law.

That said, Muxtape founder Justin Ouellette had some interesting things to say when questioned on how the labels had reacted to the service when he spoke to Wired (back in April)

Wired: Have you been contacted by labels or other copyright concerns? If so, how is that going?

JO: I've heard from lots of interested parties, and it's actually been very encouraging. Labels big and small have told me that they're excited about Muxtape as a model for discovery and ultimately selling music, and I think that's extremely keen. Cassette mixtapes were such a great way to discover new music before the internet, and I think the lessons we learned from that era can be carried into this one. A concise mix with a personal touch is a powerful way to get someone to consider a song or artist in a way they might not just hearing it on the radio, and that's the kind of experience I'm trying to replicate on Muxtape.

imeem and last fm have label deals - right now muxtape does not. It will be interesting to see how the labels approach these deals and how they work out ways to generate revenue from these digital plays.

They need to - quickly. Check this local data on the Australian Record Industry sales by dollar value - down 1/3 in the past 4 years http://www.aria.com.au/pages/documents/Physical-Salesxvalue.pdf