However, yesterday, a new theory surfaced that indicates Megaupload’s demise had less to do with piracy than previously thought. This theory stems from a 2011 article detailing Megaupload’s upcoming Megabox music store and DIY artist distribution service that would have completely disrupted the music industry.
TorrentFreak first reported about the service in early December 2011. Megabox was just in beta at that time with listed partners of 7digital, Gracenote, Rovi, and Amazon. Megaupload was in a heated marketing battle with the RIAA and MPAA who featured Kim Dotcom in an anti-piracy movie (5:10 mark). The site had just sued Universal Music Group for wrongly blocking Megaupload’s recent star-studded YouTube campaign. Things were getting vicious in December but the quiet launch of Megabox might have been the straw that broke the millionaire’s back.
Dotcom described Megabox as Megaupload’s iTunes competitor, which would even eventually offer free premium movies via Megamovie, a site set to launch in 2012. This service would take Megaupload from being just a digital locker site to a full-fledged player in the digital content game.
The kicker was Megabox would cater to unsigned artists and allow anyone to sell their creations while allowing the artist to retain 90% of the earnings. Or, artists could even giveaway their songs and would be paid through a service called Megakey. “Yes that’s right, we will pay artists even for free downloads. The Megakey business model has been tested with over a million users and it works,” Kim Dotcom told TorrentFreak in December. Megabox was planning on bypassing the labels, RIAA, and the entire music establishment.