Justin Ouellette's music trading site Muxtape, shut down after failed talks with the RIAA, the music labels' copyright cops, may not have earned him a fortune. But it has secured him a modicum of infamy. He got invited to speak earlier this week at the WebbyConnect Summit in Laguna Niguel, explaining to others on how to replicate his overnight success with making a website deeply popular with Brooklyn's most outspoken Internet users. As Ouellette elaborates in this interview, the key is to just make up something that people want. Guess what? Just because people want free music doesn't mean you can give it to them. Ouellette never figured that part out.

MySpace Music, a joint venture between the News Corp. social network and music labels Universal, Sony and Warner,finally launches next week, says Fortune, though it still won't have a CEO. MySpace users will be able to listen to and organize playlists full of songs from all three music labels for free. (EMI is the lone holdout, which means no coldplay.) Playlists will include affiliate links to Amazon.com's MP3 store. MySpace CEO Chris DeWolfe says ad revenues and song kickbacks are going to save the music industry, replacing lost CD sales.Imeem CEO Dalton Caldwell, whose company already offers a similar product,

It's not quite a startup, is it, but it's cute anyway: Tumbltape. Why open an account at a site like Muxtape that's going to get shut down for exceeding their bandwidth costs or getting in trouble with the RIAA or having even the vaguest association with trouble-prone entrepreneur Jakob Lodwick? Tumbltape makes a playlist from the songs you've already uploaded to your Tumblr blog. The site was made by Adam Gotterer and John Zanussi (in the hoodie, left), both of Connected Ventures — Lodwick's former stomping ground. Those MP3s aren't going to play themselves, so get to it. (Photo via The Daily Zanoose, a Tumblr devoted to photos of nothing but John Zanussi)

Following the shutdown of Muxtape, a site for posting online mixtapes, in a dispute with the music industry, someone has launched Opentape.fm, where you can download code to easily create your own Muxtape-like online mixtapes of MP3 files. And if the creators of Muxtape aren't directly responsible, they probably fed Opentape's developers everything they would need. The first clue is that the site is powered by the favored online publishing platform of millennial hipsters, Tumblr. Another clue is that the domain registration information points to 152 W. 57th Street in Manhattan, which just happens to be IAC CEO Barry Diller's address (Justin Ouellette, Muxtape's founder, worked at IAC site Vimeo). Then there are two small hints in the code:The site uses a package of Javascript, Mootools, which was also used by Muxtape. And in the source code, an HTML comment reading "Liberating taste" appears where an ASCII graphic appears in the Muxtape source code. The launch of Opentape is likely a tactic in Muxtape's fight against the RIAA. It puts the record industry trade organization in the position of having to play whack-a-mole as mixes pop up on numerous clone sites using the open-source software. It also means that Muxtape's backers no longer have to shoulder the site's soaring bandwidth costs.

PC Magazine includes Muxtape in its latest listicle, the "Top 100 Undiscovered Web Sites," even though the RIAA's already "discovered" it, triggering a shutdown. Poor Kyle Monson, the writer of the piece — those cushy, weeks-long magazine lead times from when a piece is submitted to when it's published do have their downsides.

Hipsters must be quite sad that Muxtape is down but we have RIAA to blame. Today's featured commenter, pepelicious knows the other problem with Muxtape though:

Muxtape founder Justin Ouellette says he's shut down the mixtape-hosting website because of a problem with the Recording Industry Association of America. A statement from the RIAA itself seems to confirm the story. Bu we hear another reason Muxtape is shutting down is that it got too expensive for Ouellette to keep up.A tipster tells us Muxtape investor Jakob Lodwick has been heard to complain that the site's hosting bill alone amounts to $30,000 per day. That figure seems absurdly high — but could our tipster have misheard Lodwick saying the bill is $30,000 a month? After Muxtape's first day, Ouellette posted the site's stats, reporting 8,685 users uploading and playing 19,731 songs over 35,000 visits cost Muxtape $118.17 with Amazon's S3 online-storage service. Extrapolate that first day over a month, at Amazon's standard rates, and you've got a $3,545 hosting bill. Compete.com confirms that Muxtape's user base has grown at least tenfold since then, making a $30,000/mo. hosting bill not just plausible, but likely. The bill is also far more than Lodwick or Ouellette seem to have expected. In an accidentally published investment term sheet, Ouellette estimated three months of hosting would cost $18,000. That's about $72,000 off the mark, enough to eat through Lodwick's $95,000 investment and shut down the site, angry letters from the RIAA or no.

Muxtape, a New York-based online-music startup much favored by the Tumblr set, has shut down its website, citing a "problem" with the RIAA, a music-industry organization which polices copyright. Could it have anything to do with the ease with which users can download music files from the site, despite founder Justin Ouellette's efforts to block them? The company blog elaborates, barely: "No artists or labels have complained. The site is not closed indefinitely. Stay tuned."

Justin Ouellette's Muxtape, a site which hosts online mixtapes, is on shaky legal ground — and not just over the way Ouellette left his former employer, IAC-owned video site Vimeo. Making a mixtape for personal use is clearly accepted; but posting it online, for everyone on the Internet to listen to? Unclear at best. Ouellette himself has hinted that he's worried about being sued. On Userscripts.org, a site where people post and discuss add-ons to the Firefox Web browser, Ouellette has been scolding programmers for creating tools that let Muxtape users download MP3 files directly from the site — even as he was claiming that he wasn't worried about copyright issues."Please remove this script, it can only contribute to getting the site shut down," Ouellette wrote in April on Userscripts.org. "As long as you can hear the music you can copy it, but that doesn't mean I'm not going to do the diligence of trying to stop casual downloading (one of the things that would hurt its long-term viability)," he wrote on another occasion. "I was naïve enough to think assholes like you wouldn't want to wreak a good thing, but I guess I was wrong," he concluded. He's been quieter since then, aside from suggesting the site would drop the popular MP3 format in an effort to stop downloaders. The scripters have kept up their efforts. Not that this cat-and-mouse game matters. The RIAA has wisely left Muxtape alone, avoiding an ugly publicity squabble over a site that has yet to show any commercial potential. If it does begin to show some financial success, then the music-industry lawyers will swoop in demanding money. People are swift to criticize the RIAA, which has made a number of boneheadedly unpopular moves. But what should we say about the naivete of entrepreneurs like Ouellette, who are hoping that battling Firefox script kiddies will somehow count in their favor when the record labels come knocking? Muxtape's lawyers might make a "safe harbor" argument under the Digital Millennium Copyright Act — but that requires showing that Ouellette was unaware of copyright violations on the site. Hard to argue that, when he uses it himself.

On Monday, we posted Muxtape founder Justin Ouellette's accidentally-emailed-to-the-Internet photo of a napkin on which he'd scribbled details of his investment deal with Jakob Lodwick. Lodwick, best known for getting fired from Vimeo, an online video-sharing site he founded, now owned by IAC. He now spends his days playing the solipsistic teenager in a man's Crocs-shod body. Now Lodwick's replacement at Vimeo, director of development Andrew Pile, joins the fun.

Yesterday, we asked why Justin Ouellette, the founder of Brooklyn's favorite music-sharing site, Muxtape, would post the terms of Jakob Lodwick's investment in Muxtape to his personal blog — especially when those terms might prove dangerous for Ouelette's friend Lodwick, an oddly charismatic tech entrepreneur who had a frosty falling out with IAC chief Barry Diller? The answer: Because even for the founder of a Web service that's grown to 140,000 users in just 5 months, sometimes email is hard. Writes Ouellette in a post replacing the now removed image:

Once an oversharer, always an oversharer — no matter what it costs, personally or financially. When IAC fired Jakob Lodwick — the Internet's own Howard Roark — from Web video site Vimeo, IAC agreed to pay Lodwick $100,000 a year until 2011, just so long as he stayed away from IAC employees in any new ventures. Lodwick, reportedly bipolar and never much one for consistency, has proven unable to resist the temptation. An image posted to former IAC employee Justin Ouellette's personal blog seems to confirm what's already been rumored: Lodwick funded Ouellette's side project, an online-music site called Muxtape, with enough cash — $95,000 in exchange for 1 percent of Muxtape's equity, going by the scribbled napkin — so that Oullette could quit IAC to run Muxtape full time.

Happy Canada Day in advance! (Fun fact: Canadians celebrate their day of independence on whatever day is convenient because no one knows the real date.) Did you know Nickelback is from Canada? (Thanks Canada!) But so are The New Pornographers, Leonard Cohen, and Neil Young. Of Montreal is from Georgia but they're named after a bad ex of the bandleader who lived in Canada so that counts. Below are the instructions for adding to this week's Friday Mixtape: Oh Canada (it's funny because it's their anthem).

It's hard out there for an Objectivist. At least, that's according to Normative founder Jakob Lodwick, who cites his mama when deciding that we're all just too negative to appreciate the risk-taking, innovative soul behind Vimeo and (too a much more secretive extent) Muxtape. You animals have scared him away from the Internet with your snide comments and ad hominem insults! Never mind that markets, like emotional states, tend to be volatile — if your will is positive enough, you can conquer all, promise! At least, that's the theory. Lodwick has decided to stop trying to live up to it and will cease to publish anything but positivity online, presumably with comments disabled.

Maybe I just have an inferiority complex about my novelty-music past, but I feel guilty about my love for song covers, particularly cross-genre covers. I even love when one hit song inspires dozens of covers. But instead of mocking the artists who remade "Crazy" or "Umbrella," shouldn't we honor them for reviving the "standards" tradition that enriched decades of jazz? Below are a few of my favorite sources for covers and the username and password for adding to this week's Friday Mixtape, "Cover Me."

Last Friday Gawker readers put together the saddest playlist in the world (which you can still hear here). This weekend, add your happiest songs to the happiest playlist ever. Instructions below.

I assumed until a few days ago that everyone had a playlist full of sad songs for when they felt really low. I mean I only had two mix CDs in college: Favorite new music, and the sad playlist. I've curated that sad playlist (now named "Blue") for six years. It's not that I'm a sad person, but a soundtrack soothes me in a time of sharp emotion, and certain songs will always hit me in the chest. So I've put a couple of songs from my "Blue" playlist on the Gawker Muxtape account. Below are the user name and password so you can upload a song to make the saddest playlist in the world.

Muxtape is a beautifully straightforward site which allows users to upload their favorite tracks to share with friends through an elegant web interface. No special software is necessary. Now another developer has provided a search engine for Muxtape. Just type in the name of a favorite band or track and browse other tracks on playlists which show in the results. It's an easy way to discover new music-and free, which means the record industry will soon strangle the service in its cradle. (via Fimoculous)

Reports came in over the last hour that Muxtape was hacked, and the online-music startup has confirmed the news on its blog.

For the second Friday mixtape contest, give us the music you headbang to. While making mine, I discovered I am a girly man with no hard rock. But here is my headbanger playlist. Make yours at Muxtape.com. [Image of Metal Steve from Diesel Sweeties]