Universal doesn't want a settlement or share of ad revenue. They want Grooveshark gone. A Universal insider was quoted as saying the label has declared 'legal jihad' against the startup.[1] This was 1 year ago. So they've had plenty of time to build their war strategy.
Besides, even if Grooveshark wanted to make a deal (I'm sure they do), they couldn't afford Universal. The vast majority of grooveshark users don't pay, but just get ads. For the ones that do pay, their monthly fee still pales in comparison to the value of the hundreds or thousands of songs they've stored in their account. I've got 300 songs in my GrooveShark. Even if were paying the $6 per month, it would take 50 months to cover the costs of those songs at $0.99 each. And during those 50 months, I would have probably added another 300 songs.
The only end game I see here is GrooveShark going out of business. And I say this with great sadness, because I'm a regular user and love the service.
How is that different from users uploading music videos on Youtube? Google won that case with Viacom, so there's precedent. Plus, as far as I know Grooveshark has some deals set up, so they aren't exactly a "rogue site", or at least it will be much harder to prove.
The thing about your 300 songs is that they aren't 300 songs in your collection.. they are 300 songs added to the system.
If anyone else streams or buys those songs, then the content owner will get paid.
Meanwhile the ads or the $6 a month fee goes only towards the songs that YOU actually STREAM from the service at streaming rates. Plus you can buy other songs for 99 cents.
If you never listen to your uploaded songs again, someone else will and they will be the ones paying the content owners.
Content owners get paid whenever anyone strams or buys anything on the system regardless of where it came from.
I don't know about the legal jihad... It's uncharacteristic for a corporation to wage "ideological" wars. At the same time, I don't think Universal is naive enough to think that the millions of Grooveshark members will suddenly start buying music just because Grooveshark is gone. I think they just want to batter Grooveshark into something more like Spotify/Pandora (i.e. bound by licensing agreement and such). Of course Grooveshark doesn't seem like it wants to bend, so it may go down. Nonetheless, I don't think that's the main goal...
As a former employee of GS I can say that getting sued is nothing new and may in fact be a good thing for them in a wierd and twisted way. The reason being is that sometimes (this was the case with EMI atleast) the labels use a lawsuit to begin negotiations. Getting sued is almost like a stamp of approval. Obviously I don't know anything about this lawsuit but if they can outlast the legal costs and emerge with a stronger subscriber base from their redesign, they'll be ok.
I really see this as more of an attempt to kill GS than to extract any value from them. The music industry is not going to just lie down and accept their irrelevance; they'll take out as many people as possible with them.
"UMG is seeking maximum damages of up to $150,000 per infringement from Grooveshark, which could mean more than a $15 billion payout if the lawsuit is successful."
Those numbers seem ridiculous. I imagine the only real purpose they serve is to create fear in similar / emerging ventures and to set an upper bound that guarantees bankruptcy.
It seems as pointless as condemning somebody to 1000 death sentences.
It's just the starting point for negotiations, and presumably there is a large punitive component to this figure. All they really want is enough damages to put GS out of business.
I think it's safe to assume without digging up legislative history that those amounts represent a theoretical deterrent, not an estimated measure of lost profits.
I like Grooveshark's business model.. I think it's one of the most clever of all the new media companies.
Media is a two way market. Both content owners and buyers must be completely satisfied for the market to work effectively.
The two problems with labels: 1. they want to get paid alot and 2. they want to control their catalogs so that they can control their marketing.
The two problems with customers: 1. they want to pay less and 2. they want to listen to whatever they like.
Grooveshark solves these problems completely. They pay copyright holders to stream songs on the system and charge customers through ads or fees for the service.
At the same time, missing songs in the library can be uploaded by users and they get fairly paid for the "work" from Grooveshark's profits. Content owners don't have to do any work to seed the system with their content but they get paid for every stream or download.
So labels save money by not having to manage their content, since, in theory, it's already been uploaded by users and the crowdsourcers make money "working" for Grooveshark.
The catalog ends up more complete than labels typically allow and the users are happier. Everybody wins.
The only problem is that the system only works if the labels give up some control and they HATE that.
Hopefully Grooveshark survives, I think it has the best shot at finding a workable path for everyone.
I don't understand why the CEO was uploading illegal files. Seems like the worst possible thing he could have done -- really kills any "we're trying to provide a legal service; not our fault our users are uploading copyrighted material" arguments. The safe harbors won't protect them if this is true.
I remember hearing Shawn Fanning say he never shared anything illegal on Napster.
I think the assumption was that the uploading of files to Grooveshark was covered by the DCMA's fair use clause. I guess he was confident of their model and its legality.
I'm not really surprised. I've always been astounded that Grooveshark (which is an awesome service, I use it everyday) was able to do what they do.
I figured that the labels were simply building enough evidence to simply destroy the service outright which will clearly send a message to anyone else who wants to do something similar.
I agree. I'm a paying customer, I love Grooveshark (and the jailbreak-only iPhone app that I've missed since switching to the 4S), but it's always been obvious that it's just a matter of time before they get shut down. I'm surprised they've lasted this long.
Came here to say this. The only viable strategy is to do as much as you can to apease them, while gently moving the industry towards innovative music products. Its their content, they have the right to do what they want with it (as frustrating as it may be). Can't give them the finger and expect them to work with you/not sue you later.
Paying Grooveshark member here, will be sad to see this go. As unorganized as their service is, their library is massive. Of course, it's obviously illegal how their library is able to be so massive. I'm hoping I can at least save my playlists so I don't have to recreate them later off memory.
I would really love it if Spotify could take some UI lessons from Grooveshark.
I also love Grooveshark, so much that I wish they'd put blocks on how much you can play for free to get more income. I often forget to log in, have adblocker on by default and after a few hours realise I've been using their service completely for 'free'.
The sad thing about this whole deal is that Grooveshark is awesome! Nevermind the fact that a simple Firefox plugin lets you download the MP3 for each song that you listen to for free...
In retrospect, it's only a matter of time before the labels go all Napster on their ass.
Saw this coming. I am a GS subscriber, but it's quite obviously a streaming version of napster.
It is really poorly organized like napster was as well - every user who has renamed a song or used alternate spelling comes up, names that make no sense, poor quality rips, etc.
I've been using Grooveshark for a couple of years now and I didn't even know they were illegal (I figured they had deals with all of the record companies) until I saw info posted about it here on HN.
They aren't technically illegal, as they (in theory) comply with takedown requests. Now, if GS staff are uploading songs themselves, then the safe harbor provision of the DMCA doesn't apply and they're in a world of legal hurt. IIRC, Universal's claim that staff are uploading the songs comes from an anonymous posting on a message board, so I doubt that claim will hold up if that's all it's based on.
I'm shocked that Grooveshark has made it this long. Especially when you compare it to the legal cases successfully prosecuted against individuals for file sharing which were clearly not commercial.
A part of this that I don't hear people discussing is that for a legal right to remain relevant it needs to be enforced. If legal and cultural precedent move towards a weakening of copyright in general, then certainly the music business (and all digital content business) will be drastically affected, even if in a specific instance (Grooveshark) they are not losing revenues.
Another thing that I think many people aren't aware of is how expensive it is to produce and market music. It's insanely expensive. The vast majority of artists with actual record deals don't come close to recouping the expense. The labels have always made money on hits, which have to cover the costs of producing and marketing them, plus all the costs of the non-hits.
I'm curious, do folks on this forum who are anti copyright enforcement for music feel the same way about software?
From what I've heard, Grooveshark has been pre-emptively making payments to the labels monthly for over the past year so that they don't sue. They labels seemed to be okay with this as they sort of figured out what Grooveshark was - I wonder what happened to cause the change of heart by Universal.
What changed is their lawyers gathered enough evidence to bring them to trial. Grooveshark pre-emptively paying labels is not a replacement for a licensing deal. Grooveshark is a company formed to exploit a legal technicality, nothing more. Their service is indeed good for the end user who doesn't have to pay to listen to any song that they want, but it is obviously bad for music labels and artists.
I wonder if there will be many winners from these music wars? I've been seeking out music released under Creative Commons licenses via Jamendo and the Internet Archive for a while now, and the quality and selection continues to improve (not just click hop, noise or tracker-based techno anymore). Most artists don't benefit from their relationships with labels, so anything that reduces their exposure can hurt their main sources of income (performances, merchandise, etc.). It will be interesting to see if new artists start ignoring labels because they simply aren't worth the trouble.
If they go down, I´d love to see them open source all the tech behind their site... maybe as a way to say Universal "now there are 1000 more sites like us, fuck you".
"UMG is seeking maximum damages of up to $150,000 per infringement from Grooveshark, which could mean more than a $15 billion payout if the lawsuit is successful."
If the RIAA/MPAA should rule our world, then $15 billion should be the price of a sandwich.
slightly offtopic: would it work to tag music on Youtube via Musicbrainz(eg http://musicbrainz.org/doc/Jaikoz) and replace GS tracks with YT streams? Would it offset legal issues onto YT?
I can't remember what is is, but I'm pretty sure there's some program that uses an interface similar to Napster/Limewire, but in the background it searches YouTube for a song, downloads the video, and extracts the mp3.
A service like this is bound to yield inconsistent quality, and YouTube will constantly be removing videos, but I suppose it could be made to work.
Here are the questions I have every time I see these music lawsuits:
How many of the people using this Grooveshark service are present/former/would-be Universal customers?
How do you prove this? Should you attempt to prove it before deciding to sue?
What if the people using Grooveshark are just too cheap or too poor to ever buy Universal releases? Is that possible?
On the flipside, what if they are also Universal's best customers? Is that possible?
The article says they named specific uploaders in the complaint. Maybe they have been able make some assumptions about them as existing/potential customers? (e.g. They have some assets and/or they've bought Universal releases in the past.)
[+] [-] DevX101|14 years ago|reply
Besides, even if Grooveshark wanted to make a deal (I'm sure they do), they couldn't afford Universal. The vast majority of grooveshark users don't pay, but just get ads. For the ones that do pay, their monthly fee still pales in comparison to the value of the hundreds or thousands of songs they've stored in their account. I've got 300 songs in my GrooveShark. Even if were paying the $6 per month, it would take 50 months to cover the costs of those songs at $0.99 each. And during those 50 months, I would have probably added another 300 songs.
The only end game I see here is GrooveShark going out of business. And I say this with great sadness, because I'm a regular user and love the service.
1. http://www.digitalmusicnews.com/stories/090310groovesharkumg
[+] [-] nextparadigms|14 years ago|reply
[+] [-] alexhawket|14 years ago|reply
If anyone else streams or buys those songs, then the content owner will get paid.
Meanwhile the ads or the $6 a month fee goes only towards the songs that YOU actually STREAM from the service at streaming rates. Plus you can buy other songs for 99 cents.
If you never listen to your uploaded songs again, someone else will and they will be the ones paying the content owners.
Content owners get paid whenever anyone strams or buys anything on the system regardless of where it came from.
[+] [-] tomkinstinch|14 years ago|reply
[+] [-] apaitch|14 years ago|reply
[+] [-] betterth|14 years ago|reply
[+] [-] physcab|14 years ago|reply
[+] [-] redthrowaway|14 years ago|reply
[+] [-] rcaught|14 years ago|reply
Those numbers seem ridiculous. I imagine the only real purpose they serve is to create fear in similar / emerging ventures and to set an upper bound that guarantees bankruptcy.
It seems as pointless as condemning somebody to 1000 death sentences.
[+] [-] idiot900|14 years ago|reply
[+] [-] 101001010111|14 years ago|reply
[+] [-] alexhawket|14 years ago|reply
Media is a two way market. Both content owners and buyers must be completely satisfied for the market to work effectively.
The two problems with labels: 1. they want to get paid alot and 2. they want to control their catalogs so that they can control their marketing.
The two problems with customers: 1. they want to pay less and 2. they want to listen to whatever they like.
Grooveshark solves these problems completely. They pay copyright holders to stream songs on the system and charge customers through ads or fees for the service.
At the same time, missing songs in the library can be uploaded by users and they get fairly paid for the "work" from Grooveshark's profits. Content owners don't have to do any work to seed the system with their content but they get paid for every stream or download.
So labels save money by not having to manage their content, since, in theory, it's already been uploaded by users and the crowdsourcers make money "working" for Grooveshark.
The catalog ends up more complete than labels typically allow and the users are happier. Everybody wins.
The only problem is that the system only works if the labels give up some control and they HATE that.
Hopefully Grooveshark survives, I think it has the best shot at finding a workable path for everyone.
[+] [-] gkoberger|14 years ago|reply
I remember hearing Shawn Fanning say he never shared anything illegal on Napster.
[+] [-] andrewfelix|14 years ago|reply
[+] [-] purephase|14 years ago|reply
I figured that the labels were simply building enough evidence to simply destroy the service outright which will clearly send a message to anyone else who wants to do something similar.
It will be interesting to see how this plays out.
[+] [-] benvanderbeek|14 years ago|reply
[+] [-] frankdenbow|14 years ago|reply
[+] [-] kin|14 years ago|reply
I would really love it if Spotify could take some UI lessons from Grooveshark.
[+] [-] baddox|14 years ago|reply
[+] [-] marquis|14 years ago|reply
[+] [-] spyder|14 years ago|reply
[+] [-] pork|14 years ago|reply
In retrospect, it's only a matter of time before the labels go all Napster on their ass.
[+] [-] kittxkat|14 years ago|reply
[+] [-] lawnchair_larry|14 years ago|reply
It is really poorly organized like napster was as well - every user who has renamed a song or used alternate spelling comes up, names that make no sense, poor quality rips, etc.
[+] [-] rick888|14 years ago|reply
I've been using Grooveshark for a couple of years now and I didn't even know they were illegal (I figured they had deals with all of the record companies) until I saw info posted about it here on HN.
[+] [-] redthrowaway|14 years ago|reply
[+] [-] b1daly|14 years ago|reply
[+] [-] ryanb|14 years ago|reply
[+] [-] MatthewPhillips|14 years ago|reply
[+] [-] qjz|14 years ago|reply
[+] [-] mrleinad|14 years ago|reply
[+] [-] plink|14 years ago|reply
If the RIAA/MPAA should rule our world, then $15 billion should be the price of a sandwich.
[+] [-] tucson|14 years ago|reply
http://99like.com/music.php
[+] [-] adrianwaj|14 years ago|reply
Probably better to do for a new startup.
[+] [-] baddox|14 years ago|reply
A service like this is bound to yield inconsistent quality, and YouTube will constantly be removing videos, but I suppose it could be made to work.
[+] [-] frankydp|14 years ago|reply
[+] [-] _gd3l|14 years ago|reply
Way to go, Universal.
[+] [-] 101001010111|14 years ago|reply
How many of the people using this Grooveshark service are present/former/would-be Universal customers?
How do you prove this? Should you attempt to prove it before deciding to sue?
What if the people using Grooveshark are just too cheap or too poor to ever buy Universal releases? Is that possible?
On the flipside, what if they are also Universal's best customers? Is that possible?
The article says they named specific uploaders in the complaint. Maybe they have been able make some assumptions about them as existing/potential customers? (e.g. They have some assets and/or they've bought Universal releases in the past.)