While Bombed With Copyright Lawsuits, Grooveshark Struggles To Maintain Its Services

While the popular music service is engaged in legal battles with all giant recording labels, it’s also determined to maintain an open and unlimited platform that that would be beneficial for the copyright owners

It’s been a black year for Grooveshark so far as all major recording labels are suing the service on grounds that vary from contractual disputes to copyright infringement. While being dragged into litigation, Grooveshark will “strive to maintain an open and unlimited platform that accommodates the rightsholder,” reads a TorrentFreak report.

November 2011: Universal Music sues the streaming service for copyright infringement, claiming damages of hundreds of millions of dollars. Sony and Warner follow suit in December 2011, and this year started with EMI suing Grooveshark over a contractual dispute.

The anti-Grooveshark “campaign” extends even outside US’ borders, with a Danish ISP being court ordered to block all access to Grooveshark.

As for Universal Music’s claims, a Grooveshark insider told TorrentFreak that the accusations are false; on this matter, Grooveshark has always aimed for obtaining licenses all around the world, speaking directly to artists and continuously building a system that helps rights holders. Apparently, that’s not enough to please the record labels.

“Grooveshark wants to keep the platform Open. That is to say, even after all the deals are inked, the company wants artists to be able to share without having to go through a label. That’s Grooveshark’s definition of open,” TorrentFreak was told.

Another issue is that Grooveshark intends to keep their platform and musical market unlimited.

“That doesn’t mean that users don’t have to pay and it certainly doesn’t mean that record labels don’t get paid, but users might pay with their attention or their interaction, or (and I know this is controversial) with their data,” the insider said.

Having a user-base of over 35 million, Grooveshark can be a real asset to the record labels, if only they would know how to use it in their advantage; but things are not that simple when it comes to multi-billions dollars businesses, especially when conflict of interests unsettle the delicate pocket of a corporatist dinosaur.

“If a 13-year old kid can’t get access to music because she or he doesn’t have a credit card and Grooveshark can earn enough money to pay a record label off of a few survey questions then that should be net positive for the label, the artist, the user and Grooveshark,” TF’s source noted.

“The alternative is piracy.”

And speaking of money, the insider further details:

“As far as I can tell, it’s not that labels don’t want money. It’s that they don’t want Grooveshark’s type of money. They see that model as a slippery slope.”
“The last thing they want is for artists to be able to make a living in a way that undercuts the 1-to-1 value of recording to dollar. It’s seen as an attack on their power base, which is not what Grooveshark set out to do.”

Although Grooveshark is supporting equity and revenues sharing – aiming for a better business model that favors both record labels and consumers, Universal, Warner and Sony chose litigation over reason in what seems to be a dispute over the DMCA.

“The DMCA Safe Harbors are not a loophole,” Grooveshark’s insider said.

“They are necessary for the progress of society and are meant for situations EXACTLY like Grooveshark’s. It’s not something to use for protection or to hide behind. It’s meant to allow the development of technologies that are potentially revolutionary. That doesn’t mean that if you operate within them, you shouldn’t be expected to reward content creators for their work and that’s not what we want them to mean.”

“When record labels use threat of criminal prosecution as a negotiating tactic you are left with two choices; Continue working to improve the user experience, build tools for those rights holders that do want to participate and do your best to walk the straight and narrow of the law. Or stop innovating in an industry that is desperate for innovation.”

“Which is the principled position?”