May 8, 2008 11:25 PM PDT

Former RIAA chief advising Project Playlist

Posted by Greg Sandoval

SAN FRANCISCO--Jeremy Riney, CEO and founder of Project Playlist is optimistic he will eventually license music from the big four record companies.

"There is no money in shutting down companies," says Project Playlist CEO Jeremy Riney

(Credit: Greg Sandoval/CNET News.coml)

He continues to harbor these hopes even after three of the four largest music labels filed a copyright lawsuit against his company last month, he said at the MusicTech Summit on Thursday.

What may be helping Riney keep his cool is that he has hired Jay Berman, the former CEO of the Recording Industry Association of America (RIAA) to help shepherd Project Playlist past copyright issues, according to a source close to the company.

Berman is co-founder of Berman Rosen, a consulting firm that he started with Hilary Rosen, another past RIAA chief.

Project Playlist, founded two years ago, aggregates links to music files and then enables users to listen on an embeddable music player that has found a following among MySpace and Facebook users. In the complaint filed on behalf of all the top music labels save for Sony BMG, which is negotiating with Project Playlist, the RIAA alleges that the majority of the links found at the site lead to pirated music.

Riney said that Project Playlist is covered by the Digital Millennium Copyright Act, which protects operators of Internet services from responsibility for illegal acts committed by users. He points out that his company doesn't host any stolen content on its site, nor does it support piracy. Furthermore, Riney said that if he can't license music legally he will shut his site down.

He might take some comfort in knowing that the labels appear to be using litigation as a way to soften up tech companies at the negotiating table.

In two high-profile copyright cases, Warner Music Group sued Imeem and Universal Music Group sued MySpace and both recording companies dropped the suits and licensed their music after receiving equity stakes.

"There is no money in shutting down companies," Riney said. "There is money in licensing companies and licensing opportunities."

Riney says now he must wait to see how the music industry plays its hand. The labels shouldn't wait too long. The advertising-supported Project Playlist, according to Riney, is profitable.