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Under House Arrest, Megaupload’s Kim Dotcom Launches New Site

He may be on house arrest, but Megaupload founder Kim Dotcom isn’t spending his time eating Doritos watching Oprah. The owner of one of the world’s largest file sharing sites before police intervened and shut it down on charges of piracy and copyright violation, Dotcom is now cooking up a new site, this time a legal cloud-based music service that allows artists to sell directly to their consumers.

An idea he was working on when Megaupload was shut down, Megabox allows artists to keep 90 percent of the profit from their albums by selling directly to consumers. The service complements Megakey, a service that allows artists to earn a profit even from free downloads.

“The major Record Labels thought Megabox is dead. Artists rejoice. It is coming and it will unchain you,” Dotcom Tweeted earlier this week.

Though Dotcom didn’t indicate how exactly artists would earn money through free downloads on Megakey, he maintained it is based on a proven, tested business model.

“The Megakey business model has been tested with over a million users, and it works. You can expect several MegaBox announcements next year, including exclusive deals with artists who are eager to depart from outdated business models,” he wrote in a guest contribution on TorrentFreak last December.

Dotcom contended the site was designed to serve artists as an alternative to the outdated music industry model in which the recording companies earn most of the profit.

“These guys think an iPad is a facial treatment, the Internet is the devil, and wired phones are still hip,” Dotcom wrote. “They are in denial about the new realities and opportunities. They don’t understand that the rip-off days are over. Artists are more educated than ever about how they are getting ripped off and how the big labels only look after themselves.”

Meanwhile, Dotcom has gained some interesting allies in the fight to regain access to his Megaupload files that had been taken down by the FBI. In addition to copyrighted material, users had also uploaded their own personal files to share with others, which the FBI has made inaccessible, contending that the site was a vast piracy enterprise causing more than $500 million in damages to copyright holders. To that end, the non-profit Electronic Frontier Foundation has offered to help retrieve the legitimate content.

And just to add a touch of celebrity, Apple’s co-founder Steve Wozniak offered his support of Dotcom and the EFF’s efforts to release the files. The two were shown in a chummy photo taken at Dotcom’s mansion in New Zealand while he was on house arrest, which the entrepreneur/alleged piracy conspirator Tweeted to his followers.

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