Neowin.net

Thanks to Lewis Benge for mailing us in with the below story.

A new music download service, launched on Tuesday in Madrid, tests a legal loophole in Spanish copyright law that appears to give Web sites permission to sell songs online without consent from record companies.

Running under a banner on its homepage that reads "No Rules. No limits," the new service, Puretunes.com, is sure to raise the ire of the music industry.

Major recording labels Sony Music, Warner Music, Universal Music, BMG, and EMI have fiercely tried to crack down on unauthorized businesses that distribute songs online.

The music industry has been scrambling to derail online file-sharing services that enable consumers to trade tracks for free. Such services have contributed to the industry's steep sales decline, highlighted on Tuesday by news EMI's sales of recorded music fell 12.6 percent in the last financial year.

According to Javier Siguenza, a Madrid-based lawyer representing Puretunes, the new company abides by Spanish copyright law even though it does not have direct authorization from the music labels themselves.

News source: Reuters

CAUGHT OFF GUARD

The International Federation of Phonographic Industry (IFPI), the global trade organization that represents the music industry, was caught off guard by the launch. An IFPI spokesman said they were reviewing the site, but had not decided if they would be taking action against it.

Puretunes will sell subscriptions allowing consumers to download songs by virtue of licensing agreements it has struck with various Spanish trade associations that represent performers and recording artists.

Puretunes will compensate the artists and labels from subscription proceeds, Siguenza said.

The site carries thousands of songs from Madonna to the Beatles. Consumers can download songs in hourly blocks.

Eight hours of downloads cost $3.99 while unlimited downloads for a month cost $24.99, a steep discount from industry-sanctioned services such as Pressplay and those operated by Britain's OD2.

Siguenza said the new service does not need individual authorization from the major music labels, a point the industry is likely to contest as they have insisted Web sites wanting to sell downloads secure the appropriate licensing contracts.

In fact, a number of labels have sued another Spanish firm, Weblisten.com, that has been selling music online.

Adding to the intrigue, Puretunes has signed Grokster, the free file-swapping network that won a recent U.S. legal decision against the music labels, as a marketing partner. Grokster will get a cut of sales leads it brings to Puretunes.

"We've been doing everything we can to sell authorized music and basically this has been our only option," said Wayne Rosso, president of Grokster. "We're out to prove a point: we can sell the music."