redletterdave writes "While prosecutors and the FBI believe Megaupload.com earned most of its $175 million in revenue from copyright infringement, a new report has surfaced, which may explain why Megaupload was really shut down. It has to do with a Megaupload venture called MegaBox, and the greediness of the Recording Industry Association of America. In mid-December 2011, roughly four weeks before Megaupload was shuttered by the FBI, the file-sharing site announced a new cloud-based music locker similar to iTunes and Google Music, which integrates a download store, a music player and a DIY artist service, collectively called MegaBox. Unlike other music services that charge artists, Schmitz's idea was to actually pay artists, even for free downloads, and to allow artists to keep 90 percent of their earnings. At the time of the announcement, Megaupload was embroiled in a battle with Universal Music Group, one of the "Big 5" music labels that represents about one-third of the U.S. music market."
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