So did SeeqPod have some means by which the artists (cough, excuse me) the labels were getting paid? They said they were paying a lot for bandwidth, so they weren't just a search engine, but also a streaming service?
I built a third party app using their API, I always wondered the reasons for shutting down the site as it just went down one day with along with its API and a vague message on their homepage.
They had a web crawler indexing all publicly accessible songs or mp3 files which made up their search, the API let you query this database including a cached version of the song hosted on their servers. They weren't just a search engine, my app streamed the cached content as the direct URLs to the public files weren't always that reliable (slow, 404'd).
So they were like a "jukebox" for playing the copyrighted content, streaming it themselves, just like Google's YouTube does. The conceptual difference is that the users themselves upload the material to YouTube, whereas SeeqPod cached the content of other sites (like Google search does, albeit not with music and videos).
I'm not surprised that they were on the list of "problematic" companies of record companies. It's fascinating though to read that Sony wanted to actually be involved with SeeqPod in a bid to compete with others.
It seems that SeeqPod's doom was "just" that they didn't have such power to confront the record companies like Google did?
That is my intuition on this as well. YouTube is allowed to continually play 'wack-a-mole' with people putting up copyrighted material. I don't see why it would be any different with SeeqPod indexing it. Further, Google probably indexes tons of images which are infringing on someone's copyright and you can view these right in their search results.
With Bing, are they not streaming directly from the original provider? They are indeed embedding it in the search results pop-over, but I didn't think they were hosting any of that themselves.