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Kim Dotcom is determined to put the major music labels out of business with Megabox. At the same time he promises to give artists full control over their own work and a healthy revenue stream. Today Dotcom released a video on the making of Megabox which unveils some of the service’s features. The video also shows “The Black Keys,” “Rusko,” “Two Fingers” and “Will.i.am” as exclusive artists.

So why would artists join Megabox in the first place? The goal of Megabox is to give the public access to free music and compensate artists through advertising revenue. Megaupload’s founder believes that this “free music” business model has the potential to decrease music piracy while giving artists proper compensation for their work. This revenue comes from the Megakey application that users have to install. Megakey works like an ad blocker, but instead of blocking ads it replaces a small percentage with Mega’s own ads. Those who prefer not to install the app have the option to buy the music instead.

“These new solutions will allow content creators to keep 90% of all earnings and generate significant income from the untapped market of free downloads,” Dotcom said.

It is clear that file-sharing encourages the distribution of existing music, and in a paper titled “A Case Study of File Sharing and Music Output” the professor examines what the connection is between music piracy and the creation of new music.

Last December, we wrote about a report put out by the Swiss executive branch noting that, based on their research, it appeared that unauthorized file sharing was not a big deal, showing that consumers were still spending just as much on entertainment, and that much of it was going directly to artists, rather than to middlemen. In other words, it was a market shift, not a big law enforcement problem. At the time, we wondered if Switzerland had just bought itself a place on the USTR's "Special 301 list" that the administration uses each year to shame countries that Hollywood doesn't like.

The past was, and the future is going to be, much more about performance. In this new world, recordings often function as more as ads for concerts than as money-makers themselves. (And sometimes are bundled with concert tickets, as Madonna's latest album was.) As a result, copying looks a lot less fearsome. A copied ad is just as effective--and maybe much more so--than the original.

Just ask pop singer Colbie Caillat. Caillet's music career began in 2005 when a friend posted several of her home-recorded songs to MySpace. One song, Bubbly, began to get word of mouth among MySpace users, and within a couple of months went viral. Soon Colbie Caillat was the No. 1 unsigned artist on MySpace. Two years after posting Bubbly, Caillet had more than 200,000 MySpace friends, and her songs had been played more than 22 million times. Caillet had built a global fan base while never leaving her Malibu home. In 2007, Universal Records released her debut album, Coco, which peaked at No. 5 on the Billboard charts and reached platinum status.

The problem of piracy in music is, of course, very different from the problem in comedy. Stand-up comics worry most about a rival, not a fan, copying their jokes. Still, the reduction of consumer copying of music via norms may be possible, and will become more imaginable if the music industry experiences ever-greater fragmentation and communication. There is already an interesting example of norms playing a substantial role in controlling copying in music. In the culture of jambands, we see the fans themselves taking action to deter pirates. What are jambands? In a fascinating 2006 paper, legal scholar Mark Schultz studied the unique culture of a group of bands that belong to a musical genre, pioneered by the Grateful Dead, characterized by long-form improvisation, extensive touring, recreational drug use, and dedicated fans. Although acts like Phish, Blues Traveler, and the Dave Mathews Band vary in their styles, they are all recognizably inspired by the progenitors of jam music, the Dead. But the Dead's influence is not only musical. Most jambands adhere to a particular relationship with their fans that also was forged by the Dead.

Some of these DMCA rules outline restrictions on the frequency some songs can be played. In any 3-hour period, we can webcast: No more than 3 songs from one album;no more than 2 played consecutively No more than 4 songs from a set/compilation;no more than 3 played consecutively No more than 4 recorded songs by the same artist(live studio appearances are okay)