Even after the spectacular failure of Napster, some people won’t give up in their quest to make music free and available to all. The crowd-powered, music-sharing app known as Grooveshark follows the path of Napster, both in its approach to sharing music and the legal setbacks that threaten to end the company’s online run. Grooveshark is in a lot of hot water lately and may not survive if its numerous enemies in the music industry can draw blood.
Grooveshark’s original intent was to provide a database of music that could be easily used and expanded by music lovers. It would be equal parts search engine, jukebox, and music recommendation service all mixed into the one.
Its current competition includes video players like AOL and Yahoo! Music as well as music services that operate with funky licensing privileges like Pandora and Turntable.fm. It even endures some friction from similar apps that charge users for listening to a certain number of hours each month, like Spotify.
The main complaint record labels have with Grooveshark is that its services are available without users having to pay at all, and that its employees have apparently been uploading thousands of songs to their database without paying for them. Needless to say, Grooveshark is peerless when it comes to making enemies out of labels and artists alike.
Grooveshark Versus EMI
Things started to get bad for Grooveshark when its relationship with London-based Electric and Musical Industries (EMI) went south. After settling a lawsuit with EMI last November, Grooveshark agreed as part of the settlement that it would make nine easy payments to EMI totaling nearly half a million dollars.
Grooveshark failed to come through with last month’s money, so EMI sued them for not honoring contractual obligations and terminated their licensing agreement in the first week of April.
Grooveshark Versus The World
As of January, Universal Music Group (UMG), Sony Music Entertainment, and Warner Music Group were all serving Grooveshark with lawsuits, and the problems did not stop there. Grooveshark’s mobile app was available on the Apple market for only three days before being removed, which is rumored to be the result of a complaint filed by UMG to Apple just before the app was introduced.
Bands and artists have also made claims that Grooveshark has compromised the value of their music. British rocker Robert Fripp of King Crimson told the New York Times that his music is still available on Grooveshark after many requests for it to be removed. Pink Floyd has also asked for all of their songs to be taken from Grooveshark’s database after their winning case against EMI ruled it illegal to distribute Pink Floyd singles, which diminishes the artistic value of their albums.
Simantob’s Damning Emails
All of these setbacks pale in comparison to certain details brought up in Universal Music’s case against Grooveshark. Evidence brought forth includes emails from Grooveshark chairman Sina Simantob to his associates in which Simantob stated that Grooveshark intentionally avoided paying a dime to record companies.
This quote from one of Simantob’s emails is particularly revealing: “We use the label’s songs till we get a 100 uniques (100 million users), by which time we can tell the labels who is listening to their music, where, and then turn around and charge them for the very data we got from them, ensuring that what we pay them in total for streaming is less than what they pay us for data mining. Let’s keep this quiet [sic] for as long as we can.”
What Will Justice Demand of Grooveshark?
Penalties in the UMG lawsuit could near $1 billion if Grooveshark loses. In theory, Grooveshark could also be held responsible by labels for damages of up to $150 thousand per work. If each individual song is considered a work, then that sum could easily be considered a nearly incalculable fortune.
What began as an effort to make money with music through ad banners, band promotions, merchandise, and premium subscriptions has morphed into an idea that was best described by Seth Goldstein, chairman of Turntable.fm.
Without using the word Grooveshark at all, Goldstein stated that there are some start-ups “that are like, ‘you know what? I’m going to just create the biggest freakin’ music service. I don’t care about the labels. I’m going to get 20 million users and then the labels are going to have to deal with me on my terms because I have the audience. And then I’ll do deals but I’ll have so much leverage, I’ll squeeze them’…labels just love that because they have tons of lawyers and they’re really good. And they force you to hire really good and really expensive lawyers, and it just becomes a war of attrition…you will lose because the VCs no longer want to back that.”
If that statement truly describes what Grooveshark has done, then a lot of people are justified in accusing Grooveshark of costing artists and labels millions of dollars in revenue by stealing intellectual property. It is probably only a matter of time before the packs of lawyers catch up to Grooveshark, and the music-sharing app will be forced to go the way of Napster and admit defeat.
==== About the Author ====
Alyse is a marketing, photography, and tech addict who spends her time investigating the next generation of technology. When she is not brushing up on her art of the scientific know how in the world, you can find her contributing to ATTSavings.com or on Twitter @Alyse_1.