The difference with online backups is that it's dedicated to music. No one wants to share their online backup account, but they might share or even sell their Anywhere.fm account. The legit use for the service is probably legally safe, but things can get gray quickly.
They should definitely requite all new uploads and store entirely separate copies of everyone's music. Doing optimization based on a file's checksum, like you'd do for a straight backup service, would be harder to explain to a judge.
They should very quickly implement a mechanism for locking accounts that get too many logins from different IP ranges in a short period of time. It shouldn't be too difficult to make it annoying for naughty users without impacting legit users. Staying on top of abuse and not letting their site get overrun like Veoh is key.
The difference with a backup hard drive is that it's dedicated to music. No one wants to share their backup hard drive, but they might share or even sell their MP3 player. The legit use for the MP3 player is probably legally safe, but things can get gray quickly.
Since this particular MP3 player can only hold MP3s, not arbitrary files, they should be required to implement a self distruct feature, even though a device that could store MP3s and files shouldn't need one.
They should definitely requite all new uploads and store entirely separate copies of everyone's music. Doing optimization based on a file's checksum, like you'd do for a straight backup service, would be harder to explain to a judge.
They should very quickly implement a mechanism for locking accounts that get too many logins from different IP ranges in a short period of time. It shouldn't be too difficult to make it annoying for naughty users without impacting legit users. Staying on top of abuse and not letting their site get overrun like Veoh is key.