Musi Won Over Millions. Is the Free Music Streaming App Too Good to Be True?

Musi has faced objections to its business practices before. In October 2019, the company filed suit against an online ad network, alleging that it had withheld payments owed for ads that ran within the Musi app. In November that year, the ad network filed a counter-complaint alleging that it stopped payments after discovering Musi’s business was fraudulent. “Musi was knowingly and illegally ripping music off from YouTube,” the counter-complaint said, alleging that when advertisers found out, it lost over $7 million. A judge granted a request from Musi to dismiss the case without prejudice in 2020.

Cherie Hu, the founder of the music-business research network Water & Music, described Musi’s interface as utilitarian. It’s a place to listen to music and make playlists, and that’s it. Users don’t see song lyrics, information about upcoming concerts, or any features hinting at collaborations or partnerships with artists. “It’s a very generic way of curating and presenting music,” she says. Even after more than a decade in operation, it still feels more like a bright CS student’s senior project rather than a professional product.

Musi claims not to host the music videos its users stream, instead emphasizing that these videos come from YouTube. Those videos appear within Musi’s own barebones interface, but some flaunt their origins with watermarks from YouTube or Vevo. Users have to sit through video ads right when they open Musi and can then stream uninterrupted audio, but video ads play silently every few songs while the music continues. The app also displays banner ads, but users can remove all ads from the app for a one-time fee of $5.99.

Unlike its leading competitors, Musi doesn’t offer a download function, so the music stops without access to the internet. “Candidly, this won’t be a feature ever, due to restrictions set in place by YouTube,” a Musi support account told a fan last year who asked on Reddit if an offline mode was coming.

James Grimmelmann, a professor of digital and internet law at Cornell University, says the way Musi operates raises a number of questions. “Is this copyright infringement? A license for YouTube might not be a license to Musi,” he says. “Does this violate YouTube’s terms of service in a way that YouTube could cut it off?” As of now, the answers are unclear.

One unknown is whether playing a song on Musi will result in the same amount of income for an artist as it would if played directly on YouTube, especially as streaming payouts calculations rely on a variety of factors. The Musi support account on Reddit has told listeners that it does, without providing any further details or evidence. It is also unclear whether a rights holder who wishes to remove their music from Musi would have a clear mechanism to do so without also pulling it from YouTube.

By tapping into YouTube in this way, Musi appears to have pulled off something remarkable: Building a booming business in streaming music without taking on any of the legwork of striking deals with labels and distributors. That causes David Herlihy, a copyright lawyer and music industry professor at Northeastern University, to describe Musi as a “bottom feeder.” He believes the app has skated by thus far because it’s not technically breaking any laws. “It’s legal,” he says. “They’re linking to YouTube, and YouTube has licenses.”