I remember a few years ago in my old apartment my roommate and I would throw parties. Things would get pretty out of hand. But, one thing we knew we could count on amidst the revelry was hands-free DJ’ing via a predetermined playlist on Grooveshark that we’d kick around for days leading up to the party. And if, by chance, we couldn’t find the music we wanted we would just upload it to Grooveshark ourselves.
Founded in 2006, Grooveshark has built out this wonderful niche as a tremendous, free, go-to online music streaming cache. Today it’s got over 35 million members. But, how did they do it, particularly with user-uploaded content? There’s a reason that the Napster’s and KazaA’s of the turn of the millennium are no longer in existence–replaced by subscription-based streaming services, like Spotify, Rhapsody and Rdio, that all license their content from record labels.
User-Generated Content
Grooveshark operates similarly to YouTube and Vimeo, whereby users can upload content. User-generated content need comply with the site’s Terms of Service, which states that it cannot be illegal, invasive of privacy, infringing of intellectual property rights, etc. According to Grooveshark’s Sr. VP of External Affairs Paul Geller, Grooveshark operates “within the boundaries of the Digital Millennium Copyright Act of 1998 (DMCA).” Therefore, Groovehsark must honor takedown requests of unlicensed or otherwise illegal content not in compliance with intellectual property law.
Trouble
Though it claims its legality per the DMCA, Grooveshark was sued in 2010 by the Universal Music Group, Sony Music and the Warner Music Group for federal copyright infringement. And just this past Wednesday, January 4th, EMI Music Publishing, the last of the four major record labels (and the only one Grooveshark actually reached a licensing deal with), filed suit against Grooveshark’s parent company, the Escape Media Group, claiming breach of contract for lack of royalty payments. Read more on The New York Times.
State of the Industry
Just yesterday digital music sales topped the physical sale of music for the firs time in history, accounting for 50.3% of music sales in 2011, according to a Nielsen and Billboard report. Folks can purchase music most anywhere online today. What you’re not paying 99-cents for on iTunes or Amazon, and then uploading directly to your smartphones or iPods, you’re paying to stream from services like Spotify, Rhapsody, Rdio, etc. It is safe to say that they’ve figured out a way to monetize digital music–a far cry away from the days of P2P sharing on Napster. Low and behold, this clearly creates something of a no-man’s land for a service like Grooveshark, which at its most basic level, is free to users…meaning somebody (major record labels) isn’t getting their cut along the audio-finance stream.
Big Fish Functionality
Though Grooveshark may be in troubled waters, it is still today one of the best music sites. In addition to one of the largest online libraries of music in the world, it also features useful music discovery tools like a radio station through which you can like or dislike suggested tracks, letting Grooveshark know just what tickles your auditory lobes. Throw in some social features to follow other users and their musical activity, and you’re looking at one mean online music product. Check out our course on Grooveshark to learn how to get the most out of it!
