Kim Dotcom explains why he leaked the partnership discussion with UMG

Heavily indebted serial entrepreneur Kim Dotcom has leaked a 32-minuterecording between himself and executives at Universal Music Group.

The discussion was over a potential deal between the major label and Dotcom’s Megakey, his system to monetise free music by replacing Google-generated ads with ones supplied by Mega.

Interestingly, the discussion took place on January 18 2012, two days before his mansion in Coatesville, Auckland was raided by 76 officers and two helicopters for allegedly conspiring to commit money laundering, racketeering, conspiring to commit copyright infringement and enabling online piracy.

Speaking to TMN this morning, the German-born, New Zealand-based businessman said the government recently gave him back the data which was seized following the 2012 raid.

“[…] After years of court battles to get ourclones back the government finally had no choice but to give us our data back,” Dotcom told TMN.

Earlier this year the US Governmentwon a civil forfeiture case against Dotcom and his cloud storage website Megaupload. The win saw authorities seize his bank accounts and possessions worth an estimated $67 million. Then in June he was granted interim relief from the forfeiture order in New Zealand only, because the “fugitive disentitlement” doctrine forms no part of New Zealand common law.

“They held on to [the clones of the data] for over 1000 days not allowing us access and denying us our rights to natural justice and to prepare for the extradition hearing,” he told TMN. “We only received our clones of the data the government has seized during the raid recently, after waiting for over three years.”

Dotcom’s discussion with UMG execs saw the two parties negotiate an ad sales deal, which would take on Google by diverting its ad revenue to the label.

Dotcom advised the execs to only replace ads served from Google: “If we were to enter a partnership with UMG, we would advise to only, for example at the start, to only replace ads being served from Google,” he said in the recording. “Because Google, frankly, is benefiting the most of all Internet companies from piracy.

“They host the world’s largest piracy index and if you want to find a song that belongs to UMG you just go to Google and you find a thousand links on a hundred different sites,” Dotcom continued. “These guys are probably not sending you the ad dollars that they are making, so I think that replacing ads from Google would be a fair thing. You are basically now charging a little tax for the benefits that they have with your content.”

One UMG executive framed the proposed “tax” in a softer way: “I’d argue that what you are trying to do is not imposing a tax on anybody, it’s that you are giving users a chance to control their own destiny when it comes to how ads are served and to participate in the revenue generated from it,” he said. “Because anything that has the word tax in it is immediately ‘Oh God!”

Dotcom released the recording just after the official launch of Dotcom’s hyped music streaming service Baboom (formerly Megabox), which was unveiled yesterday complete with a partnership in Australiawith APRA AMCOS.

Dotcom told TMN the recordings’ well-timed release was not a coincidence: “I'm going through all the stuff and thought it would be timely to release this because Baboom has just launched.”

He also said that while he had sold Baboom in October last year, he is involved. “I have no business ties. But it's my brain child and of course I'm supporting the development team. They are my friends and I'm proud of them.”

On the recorded call, which kicks off mid-conversation, UMG representativesadmitted “the business has been controlled by lawyers for a long time”following the Napster era.

Dotcom was pushing for a new era for content creators.

“We are dealing with everyone who just hates us and wants to kill us but I think we really have a solution that can solve the problem of the content creators,” he said in the recording. “We are very proud of it and would love to work with you guys as you seem to be really getting it and I’m so happy that we have had this meeting now.”

Dotcom told TMN this morning that one of his reasons for leaking the recording was to emphasise his stance on content creators’ renumeration: “I also like to show that I always cared about artists and was working on solutions to increase their Internet income substantially.”