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Grooveshark 2007-2015

By | Published on Friday 1 May 2015

Grooveshark

The music industry will be dining on a generous helping of shark fin soup tonight after finally forcing the always contentious not-really-licensed streaming service Grooveshark off the internet.

It’s been a very long time coming, though in the end it was a technicality and a revelation that helped the record industry harpoon the pesky streaming music upstart that relied on its users’ MP3 collections and the US Digital Millennium Copyright Act to go live without the labels onboard.

This has been a long-running beef (as you’ll see here), with the then standalone EMI the first to go legal after Grooveshark went online in 2007 with a music library uploaded by its users. The firm had got licences from some independents, but most labels – including all the majors – were not on board, even though their content was on the platform.

But Grooveshark claimed that because its users uploaded the music, and it had a takedown system so that rights owners could have their songs or recordings removed, it was protected by the safe harbours of the DMCA, just like YouTube. The record industry wasn’t impressed with that defence, but it wasn’t clear who’d win if the case got to court.

EMI settled and did a licensing deal with the service. Though the label subsequently accused the digital company of breach of contract and sued again. Meanwhile Universal Music joined the litigation party (later backed by the other majors), initially using the also much reported pre-1972 technicality. The mega-major argued that the DMCA only covered sound recordings back to the early 1970s, and therefore there were no safe harbours if Grooveshark distributed recordings that pre-dated 1972, even if the tracks had been uploaded by users.

Grooveshark was forced to share some data as that lawsuit went through the motions, and in those files the major found the smoking gun that meant it could sue without fearing the safe harbour defence: staff at the streaming firm had been told to upload content to its platform, and the company’s directors had done likewise. And the minute the company itself is uploading content without permission from labels and publishers, well, hurrah, that’s straightforward copyright infringement.

The Groovesharkers denied that tracks were routinely pumped onto its servers from within its HQ, but last September an American court ruled in favour of the labels. And then last week the judge overseeing the case confirmed that a jury set to consider damages would be empowered to award the labels the maximum sum allowed under US law: $150,000 for each of the nearly 5000 tracks listed in Universal’s litigation.

And given US juries are weirdly prone to opt for the higher end of possible damages in copyright infringement cases, that could have left Grooveshark with a bill for $736 million.

We knew the company would never be able to pay anything like that sum. The firm was already struggling in an increasingly competitive streaming music market, its many legal woes having made it all but impossible to raise new investment. So it was perhaps not too surprising when, over night, Grooveshark disappeared from the internet, its founders having reached a settlement with the record industry.

It’s a big victory for the music rights sector in one of its longest and highest profile legal battles with an online operator, though while the shark fin soup may flow tonight, the music community won’t get much more out of the last minute settlement deal.

Grooveshark’s limited means of late may have helped the labels, in that it forced the firm to finally give up the fight, but it means there is no pile of cash for the record industry to grab to compensate for past infringement. Though for Universal in particular, it’s long seemed that the end game here was to simply force Grooveshark out of business. So job done.

The main cost for founders Josh Greenberg and Sam Tarantino – often cocky about their business model and the record industry’s response to it in the early days – was publishing a humiliating apology in place of their website.

“We started out nearly ten years ago with the goal of helping fans share and discover music”, they write. “But despite [the] best of intentions, we made very serious mistakes. We failed to secure licenses from rights holders for the vast amount of music on the service. That was wrong. We apologise. Without reservation”.

They were also forced to plug their licensed rivals and the Music Matters website, while all Grooveshark intellectual property, including patents, copyright and trademarks, will be transferred to the labels.

Meanwhile all the data on the firm’s servers has been wiped. Which is possibly a missed trick. The one clever thing about Grooveshark was that it got the fans to do the tedious task of digitising the record industry’s content, and therefore its library included plenty of repertoire that the record industry is yet to get online.

Concluding their humiliation, given how many times they waffled on over the years about how there’s was an artist-friendly platform, the Grooveshark founders concluded: “If you love music and respect the artists, songwriters and everyone else who makes great music possible, use a licensed service that compensates artists and other rights holders”.

Re/Code says that if the firm’s founders break the terms of their settlement they would be liable to pay $75 million in damages, which is likely to focus their attention on not doing so. Which means this is, presumably, well and truly the end of an era. Though, that said, the battle has only just begun to close the copyright law loophole that allowed Grooveshark to survive for this long.

Read the full parting letter from the Groovesharkers here.



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