Startup Murfie Gets $1.4 Million To Rip Used CD’s & Sell Them As Downloads
Murfie, an online marketplace that rips and sells the downloads of used music CD's, has closed a funding round of $1.4 million led by DaneVest Tech Fund along with angel investors including Barry Silbert, CEO of SecondMarket. The Madison, Wisconsin based startup has also been selected for the TechStars Winter 2012 Boston Program.
Murfie users send in CD's, which the company stores in a "secure facility", rips them and puts the downloads up for sale. If Murfie sounds a bit like controversial used mp3 marketplace ReDigi, who are currently being sued by EMI, the difference is that Murfie takes possession of and stores the CD before ripping and selling it. That's an important distinction that is still likely to be challenged in the courts by record labels.
Since launching last year, Murfie says it has 4,000 active customers selling more than 120,000 CDs, with about 1- 2,000 new CDs coming in daily. The new funds are slated for marketing initiatives and scaling-up Murfie’s technical infrastructure.
But you don’t need to have the physical CD sent to you, when you buy one for 1$, right ? (in fact they seem to encourage you not to ) .
So , basically, they get hold of one used CD, and sell multiple downloads to anybody who wants one , right ? And they don’t have to pay copyright owners. And because it’s up to users to send in used CD’s , they can’t be accused of facilitating upload of copyrighted material. Nice scheme.
The level of ingenuity and energy being deployed to rip off artists is truly mind boggling.
Ghostwriter
I believe that your understanding of the business model is correct.
I have to admit, I like this idea more than Redigi’s malware-model, but it leaves it up to people to be honest about having deleted any songs they may have ripped from the CD while they owned it. That seems a bit dubious. How do they test if someone has deleted the files?
There will be an interesting legal battle over the first-sale doctrine. While they could receive, sell and then ship the CDs to second hand buyers, I’m pretty sure they run into trouble when they rip the CDs into some other digital format, and then offer those songs for download. Even if the download is only being offered to the current “owner” of the CD the have in their warehouse. The ripping isn’t being done by the home user, and I’m sure a lawyer at a label will have the same argument.
I’m not a lawyer, but it sounds iffy to me. I think individuals who rip CDs to MP3s on a hard drive, might be protected under the home recording act of 1992, but that has to be determined on a case-by-case basis. When you hire a for profit company to do the ripping for you it gets legally funky. Murfie is keeping 30% of all sales, so it isn’t like this is an altruistic music archival service.
This is similar to what Lala.com was doing when they were a peer-to-peer netflix for music CDs, before they turned into an uploaded music-locker, and eventually got bought by Apple and turned into iTunes Match. For some reason I don’t see that happening here.
It would be cool to see indie artists who own their own songs and masters sell CDs and downloads through this site.
Ghostwriter,
Someone has to purchase ownership of the CD before they can buy a $1 download. The purchase price is set by the current owner of the CD. Upon purchase the ownership of the CD is transfered to the buyer and away from the seller, and the buyer is then permitted to buy a “backup” digital copy for $1.
Example: ownership of an Adele 21 CD is available for $9. You must pay $9 before you own the CD, then you can either pay $1 for a download or $3 to have them ship the CD to you.
On further investigation, you can’t just buy ownership of a CD. You must buy ownership and a download at the same time, and then pay an extra $3 for them to ship you the CD if you want the physical copy. Also it can take up to 3 days for them to post your Downloads.
FROM THE SITE: “Heads-up: you’re purchasing a new disc. Allow up to 3 business days for us to post your download.”
WOW what a great model the transfer of copyrighted music without compensation of the creators. These investors and any funds that have given them money need to check themselves for an inkling of morality in their investment criteria. The fact that investors are putting money into a parasitical business when legitimate ones are in need of cash is not a good sign of the times.
Here’s an Idea investors put your money in physical. We need more blu-ray and vinyl plants STAT and the owners of them can’t get investors to take a look and many had to delay both types of releases during the run up to the holiday because of capacity. As well every artists, band, distributor, manufacture and retailer in the physical game is playing catchup to the renewed consumer demand for physical and can use some investors.
Now if we could get investors to stop thinking that everything about music has to be digital and notice that the fans/consumers never said give it to them only one way we could get the US back on track to exporting USMADEMUSIC once again and win the future.
Yes, but wait :
This is even more devilish that i thought !
Murfie has a used copy of an Adele album. Price 1$
– Buyer A buys it for 1$. He is now the owner. He doesn’t need the physical CD, just the download. So Murfie keeps it.
-Buyer B buys this cd from buyer A. He is now the owner. He doesn’t need the physical CD, just the download. So Murfie keeps it.
-Buyer C buys this cd from buyer B. He is now the owner. He doesn’t need the physical CD, just the download. So Murfie keeps it.
Repeat a few thousands/million times.
Murfie gets 30% on each of these transactions. Only one CD was used. Artists get nothing of course.
If you really want the CD here’s what they say on their site :”In general, Murfie is designed for internet-based delivery, but we do offer physical delivery of CDs in your Murfie collection by special request.” And it’s 3$ for the delivery. You can bet 90% of people could care less about having the physical copy.
It might be very hard to legally attack the way it works.
I think this could be one of the most devilish rip off schemes ever devised. Megaupload & co are a bunch of kiddie amateurs compared to the ingenuity of this system.
It’s just sad to see so much brainpower deployed for such unethical endeavours.
It’s like fractional reserve banking, only with music! Hooray!
WTF?
What a scam.
P.S. The honor system doesn’t work. This business model is taking piracy to a whole new level of shame.
P.P.S.
Who ever is in charge at Murfie must have a pretty kick ass CD collection by now.
Does the original CD owner get a cut of digital sales?
well they had a couple on my wish list (out of about 10) of discs that I can’t find anywhere else to buy. However, the seller sets the price so I’m still looking at >$20. I didn’t see many boots or fan releases. I’m still kinda disappointed I kept getting “Oh snap” (not available).
That’s my issue. A band dissolves, their cd’s sell out and … their music disappears forever.
You have to hold the CD for 30 days before selling, which helps to prevent it from being flipped a few million times.
What’s the difference, really, between this model and a used CD store or ebay? It does have less friction of shipping costs and/or a physical trip to the store. If someone is going to be nefarious (e.g., making a bootleg copy of the cd and then reselling), they don’t need murfie to do that.
There are some comments about Murfie around this article that reflect misunderstandings, questions, and concerns that we would love to help clear up. Here are some details about our service, which will hopefully answer and clarify items mentioned in the comments:
Members send us their CDs, buy new CDs from us, and buy used CDs from other members. We store each CD for its owner’s exclusive use in our warehouse in Madison, Wisconsin. Each CD’s content is placed in a private online locker from which only the owner may stream or download its content, via their murfie.com account. Where Murfie is unique online, is that members’ CDs remain a real physical property, and thus they can sell or trade away CDs they no longer want to other members.
Members’ CDs are their property and they enjoy every liberty in using it that the law allows. This is why Murfie is the best possible platform when it comes to consuming your music in the format and bitrate you want on the devices you choose. However, to protect rightsholders from the potential of serial copying and sale of a single CD by multiple members (which could over time become easier in Murfie’s model than it already is at a brick-and-mortar used record store), Murfie has agreed to prevent the sale or trading in our marketplace of downloaded CDs.
When a member sells a CD from their Murfie collection, we remove it from their murfie.com digital locker before completing the transaction and adding the content to the purchaser’s digital locker. This works exactly like selling a CD at a yard sale 🙂
Some history: Originally we only supported downloads, not streaming, and we explicitly let people occasionally resell discs they had downloaded, imposing a 30-day waiting period before allowing a resale and requiring they delete any other copies. This was not being abused—people really did generally keep the CDs they liked and sold stuff they didn’t want—but it was a point of clear concern to artists and labels that abuse was possible, so we changed it.
Details on ways to buy a disc, since we actually have 3 ways a member can buy a disc:
1. New discs from Murfie: we purchase and stock new discs via a distributor, and these are immediately available for streaming, download, or shipment after purchase by a member. New disc sales represent a significant, and growing, part of our revenue.
2. Used discs, from a member: as above, Murfie is a platform for sales from one member to another. Used disc sales represent the largest fraction of our revenue.
3. Orders: we’ll acquire and add any disc we buy for a member, but these are non-stock items and usually take a few days as the seller we buy it from has to ship it to us.
A more current review of Murfie can be found here on Hypebot: https://www.hypebot.com/hypebot/2013/07/murfie-provides-the-cloud-for-your-cd-collection.html. I’m happy to answer any questions or respond to any further comments you may have!
– Kayla at Murfie