Monday, May 4, 2015

Grooveshark Shuts Down

Grooveshark shut down image
If you enjoyed the free online music service Grooveshark at any time of the 8 years of its existence, you probably wondered about how it was able to stay in business. The service was basically a way to search for any song, then play it from within the Grooveshark player on your browser.

The big problem was that the service didn't license any of the material it played or pay royalties either, and as a result, the service was hit with a lawsuit that could have resulted in the company owing the record labels as much as $756 million.

That legal battle was finally found in favor of the labels, and as part of the settlement, Grooveshark has been shut down immediately. The company had as many as 20 million users, who must now look for a new music service.

In a statement on the company's website, it admitted that it had "made serious mistakes." "We failed to secure licenses from rights holders for the vast amount of music on the service,” it reads. “That was wrong. We apologize. Without reservation."
What's more, the company's founders are forbidden from starting a new music service under the threat of a $75 million fee for damages.

The technology to distribute music is easier to create than obtaining the necessary licenses to make it operate, which Grooveshark unfortunately discovered way too late. That's a main reason why technologists and venture money have been discouraged from entering the business in recent years.

Is that stifling innovation? Maybe, but it's more important that creators get paid at least something for their efforts whenever possible. Now if you could only find a way for more of it to find its way into the pockets of artists and songwriters and less into the label coffers.

1 comment:

Peter McDonald said...

WHAT? Forbidden from creating a music service or be fined $75 Million.

That is completely outrageous. Surely labels should be using the talents of such individuals. The fact that they managed to run a service that allowed 20 million users to stream (obviously not all at the same time but still) is very impressive.

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