"We have a cool and innovative site ready to launch, but we're currently scratching our heads as to how to proceed," Reznor wrote in an online note to fans.
He says that Universal pulled the plug on the site at the last minute due to fear that users would post clips that violated other musicians' copyrights.
Reznor had intended for the remix site to launch earlier this week, to coincide with Nine Inch Nails' release of a new version of Year Zero that includes mashups created by fans. Universal, Nine Inch Nails' former record label and owner of the rights to Year Zero, previously agreed to make the tracks available to users for mashups.
Now, however, Universal is declining to host the new site because the company is worried about the legal ramifications if users post clips that include pirated material, according to Reznor.
"Their premise is that if any fan decides to remix one of my masters with material Universal doesn't own--a "mashup", a sample, whatever--and upload it to the site, there is no safe harbor under the DMCA (according to Universal) and they will be doing exactly what MySpace and YouTube are doing," Reznor wrote to his fans.
Reznor adds that the record label will still allow him to host the mashups, but only if he agrees to be liable for any copyright infringement that occurs at the site--an option he has apparently rejected for now.
Google argues that the "safe harbor" provisions of the Digital Millennium Copyright Act immunize the company from liability as long as it removes clips once it learns they violate another company's copyright.
But Universal, Viacom and other media companies say YouTube and other sites don't qualify for the safe harbor provisions because they have profited from copyrighted content by using it to build their brands and draw traffic--which in turn has led to greater ad revenue.