Russian music download site to shut down

Allofmp3.com becomes latest pawn in US-Russian relationship

The Russian download site allofmp3.com is to shut down from 1 June 2007, forcing millions of Britons to buy their online music elsewhere, according to a report on Slashdot.

Allofmp3.com has long been a thorn in the side of the music industry. It offers high-quality mp3s for 11 cents (6p) per track, much less than the 79p rivals typically charge.

Market watchers XTNdata estimated in April that the site has cornered 14 per cent of the UK online music market, second only to iTunes which has 44 per cent.

Its library is even more comprehensive than iTunes because it lists albums by The Beatles and other artists who don't permit their music to be sold in digital formats.

Allofmp3.com has remained legal under Russian law through a series of loopholes that mean it doesn't have to pay royalties to musicians. The website was seen by many analysts as Russia's biggest barrier to entry of the World Trade Organisation (WTO).

An official document details the agreement between Russia and the US and paves the way for Russia to join the WTO.

A further report from Inside Trade.com highlights Russia's commitments, including permanently shutting down illegal CD copying within the state. Russia currently produces about 390 million CDs and DVDs a year, flooding Europe and further afield with bootleg music and films.

The report says: "Of the 54 plants in Russia producing optical discs, 18 are on lands owned or leased by Russian government entities".

Inside Trade went on to quote Erick Schwartz, counsel to the International Intellectual Property Alliance, who had been negotiating with Russia over the matter. He warned that the agreement could still turn to dust as it will be hard to get Russia to implement the commitments.

The closure will come as a blow to consumers who see the website, and illegal P2P sites, as valid competition keeping legal music prices reasonable.