Musi has previously faced objections to his business practices. In October 2019, the company filed suit against an online advertising network, alleging that it withheld payments due for advertisements displayed on the Musi app. In November of that year, the ad network filed a counter-complaint, claiming it stopped payments after discovering Musi's company was fraudulent. “Musi knowingly and illegally ripped music from YouTube,” read the counter-complaint, which alleged that when advertisers found out, it lost more than $7 million. A judge granted a request by 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 create playlists, and that's it. Users won't see lyrics, information about upcoming concerts, or features indicating collaborations or partnerships with artists. “It's a very general way of curating and presenting music,” she says. Even after more than a decade of use, it still feels more like a senior project from a brilliant CS student than a professional product.
Musi claims not to host the music videos its users stream, instead emphasizing that these videos come from YouTube. These videos appear in Musi's own barebones interface, but some show off their origins with watermarks from YouTube or Vevo. Users must watch video ads as soon as they open Musi and can then stream audio uninterruptedly, 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 does not offer a download function, meaning the music stops playing without internet access. “Honestly, this will never be a feature, due to the restrictions YouTube has imposed,” said a Musi support account told a fan last year asked on Reddit if an offline mode was on the way.
James Grimmelmann, a professor of digital and internet law at Cornell University, says the way Musi operates raises a number of questions. “Is this a copyright infringement? A license for YouTube may not be a license for Musi,” he says. “Does this violate YouTube's terms of service in a way that YouTube could cut it off?” So far the answers are unclear.
One unknown is whether playing a song on Musi will generate the same income for an artist as if it were played directly on YouTube, especially since streaming payout calculations depend on several factors. The Musi support account on Reddit has told listeners that it does so, without providing further details or evidence. It's also unclear whether a rights holder wanting to remove their music from Musi would have a clear mechanism to do so without also removing it from YouTube.
By tapping into With YouTube, Musi seems to have accomplished something remarkable in this way: building a thriving music streaming business without doing the legwork of closing deals with labels and distributors. That causes David Herlihy, a copyright attorney and music industry professor at Northeastern University, to describe Musi as a “bottom feeder.” He believes the app has been successful so far because it technically doesn't break any laws. “It's legal,” he says. “They link to YouTube and YouTube has licenses.”