|According to the Digital Millenium Copyright Act (DMCA), MP3tunes and Sideload.com fall under what's called "safe harbor provisions," or "DMCA safe harbor," which insulates it from a copyright infringement lawsuit from EMI. New York District Court Judge William H. Pauley has decided in a landmark decision to allow MP3Tunes to keep the music alive.
MP3.com founder Michael Robertson sold off the site and launched MP3tunes.com, which was designed to help indie artists sell their music. In fall 2005, it added a storage service letting users store files in personal online storage lockers, and songs uploaded to these lockers could be played and downloaded through any web-connected device.
What does this mean for streaming music? All of the in-the-cloud music services (or music locker) that launched this Summer without an agreement with the recording labels have made a wise decision, based on this decision of this case, although it's likely to be appealed. There's no need to have a royalty contract in place, as they're not liable for copyright infringement. Google Music and the Amazon Cloud Drive are two major players that come to mind. Although details are still scarce, Apple appears to have taken a step that will only be classified as "Playing nice with the labels," unless the details of their iCloud launch reveal otherwise.
This does mean that the emphasis is placed on the person who uploads the files, so if you're sharing music files with others for download without authorization, you might get a DMCA takedown notice. If you have the files in a music locker, i.e. storing for your own personal consumption, you're cool to the idea of a copyright lawsuit. Your music is your music. If you're putting them on the web in a way that let's anyone (even people you don't know) download them, you could be sued for copyright infringement.
Check out more about steaming music sites in the Spacelab Streaming Music Guide.