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.
Well, if the allegations are true, Universal says Grooveshark employees personally uploaded tracks they did not have rights to in order to fill gaps in the database.
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...
>It's uncharacteristic for a corporation to wage "ideological" wars
I thoroughly disagree with this. Corporations often wage "ideological" "wars". That's what lobbying is all about -- a corporation has decided Public Policy X will either help or harm their corporate interests, so they pay lobbyists to advocate for or against it.
Media companies like Universal, Disney, et al guard copyright very closely. They want to advocate the belief that intellectual property is identical to physical property and that the only rights anyone has to an idea are the rights that the idea's copyright owner decides they should have (usually granted when the petitioners include a large check with their request for rights).
Copyright is the most vital issue to media companies and they treat it as such. If they find what they believe to be gross infringement, they are not kind to its purveyors -- I think we've had enough history in filesharing to know that.
Grooveshark is just another way to skin the cat. Its extensive (and some would say "egregious") use of DMCA safe harbor provisions I think probably is one of the major inspirations for SOPA and PROTECT-IP. Cases against Kazaa, Grokster, and others did not come attached with new legislation because they didn't really have a plausible case under the DMCA. Grooveshark's service-oriented approach makes them a clear safe harbor, and unless Grooveshark quickly sees legitimization as a marketing channel and gets "white-knighted" a la YouTube and Google, they will remain rogue and the media companies will keep hounding until they get at the jugular. Since Grooveshark is using DMCA as a cover, the media companies just want complete control over "the internet" (i.e., the internet as most people know it, DNS) so they can send the Federal Bureau of Cybercrime Protection a notice and have Grooveshark or other services with a plausible legal defense blacklisted just like that -- no need for pesky "trials" when records companies are losing hypothetical money!
It should be common knowledge by now that old media will keep at this game until it ruins them. They are absolutely committed to it, and they will fight to death -- either theirs or ours -- to get copyright the way they want it, so that they can gain more cash from the so-called "lost sales" perpetrated by anyone listening to major label music or watching major studio movies but not buying at retail or iTunes.
I don't think the word ideological means what you think it means. Ideological behaviour is behaviour motivated by ideas, not profits. Corporate lobbying is essentially always motivated by profit, not ideas. Can you name a company who lobbies for policies they honestly think will lower their profits?
I think it's fair to say that nobody at Universal has any idea if Grooveshark is actually raising or lowering their profits. Nobody has conducted any kind of inquiry to see whether the sales lost via Grooveshark are compensated by the value provided to music-owning consumers (upload, play anywhere) and the free publicity gained, and nobody cares to.
Rather, the industry decided long ago that it would take it as an a priori truth that any kind of piracy costs them money, and act accordingly. That's an ideological stance.
This lawsuit is likely not pertaining to cost but rather to control.
Grooveshark is not really "piracy" since every content owner gets paid regardless of the origin of the content. Whether it cannibalizes other revenue sources is up for debate.
However, copyright is also about control and owners want complete control of their catalogs.. for a good reason.
Grooveshark crowdsources catalogs without permission from copyright owners and then only lets them manage the content via DMCA takedowns. The labels have to relinquish control to the users for this system to work and that is what they are objecting too.
Money and control is what copyright is about. Big media are ideologically against Grooveshark paying their users to seed the system without the owners consent.
To use an analogy: Grooveshark is a grocery store where the customers personally stock the shelves with Coca-cola products but the company doesn't get to decide which products are available. Maybe the customers don't like Coke Zero and refuse to stock it. Coca-cola can't do anything except remove stock they don't want there.
Except the analogy falls down since Grooveshark is digital and the shelf space is infinite. The labels can add their entire catalog themselves, but they don't want to.
If a band is touring the world to promote an album, their presence in a given country has a huge impact on sales in that country.
If music is leaked across the internet way in advance of the tour/pr/marketing drive, then sales of the album drop precipitously. It's not possible to be everywhere on Earth at once, so it's then impossible to effectively market the album.
Agree - it's really the cabal of old guys looking to screw over a young upstart competitors.
Crooked movie/entertainment businessmen? Sounds just like those old gangster/movie tycoons in the old Raymond Chandler novels I've been rereading since moving to LA!
It's always motivated by expected profit. "Ideological" just means it's not about next quarter's profit, but about creating an environment more conducive to profit in the long term.
Right, Grooveshark's entire business model is centered around DMCA protections. Only "user-generated content" affords a DMCA safe harbor defense, so all the copyrighted music they host has to be uploaded by individual users who each assert that they have the rights to distribute the song.
Both Spotify and Grooveshark pay royalties to labels that they have a license agreement with. But if you don't want your stuff on a streaming service, users will upload it to Grooveshark anyway.
This is also the reason why there is so much cool stuff on Grooveshark that is not on Spotify. Forgotten albums, bootlegs, remixes and mainstream music from certain bands. Grooveshark will also never show you a "this song is not available in your region" message.
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.
You are probably right but this is a war of attrition. There are many, if not the majority, of industry music types who will act this way, but the old guard is literally dying away. So if GS doesn't outlast then a new company most certainly will, it's just a question of when. The power is starting to shift to the artists anyways, and I predict you'll soon start seeing the music industry being run by former artists or artist managers. Take a look at Troy Carter for example, who is Lady Gaga's manager. I'm pretty sure he is an investor in Turntable.fm.
"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.
Statutory damages are different from an estimated measure of lost profits.
US copyright act: "the copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action".
Statutory damages in the US are a minimum of $200 per work and a max of $150k. The minimum is quite the minimum too: "In a case where the infringer sustains the burden of proving, and the court finds, that such infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court in its discretion may reduce the award of statutory damages to a sum of not less than $200".
Having to defend against claims for damages that do not need to be supported by any proof of loss is itself a deterrent, whatever the amounts may be, in my opinion.
Universal's actual losses might be zero but as long as they can prove infringement and that the defendant (intentionally or not) was an infringer, they can get a judgment for damages.
Of course winning some copyright litigation and winning the larger battle over monopolistic control of music distribution channels may be two different things.
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.
Every industry has deals that are too good to be true. Hell, buying stolen cartons of cigarettes out the back of a truck is "obviously illegal" but people have done it for centuries. No, I'm not equating copyright violation with theft - you could say "it says a lot about the software industry that a site where you could type in the name of a program and download it for free is 'obviously illegal'". Kind of like the vast majority of uses of the pirate bay are illegal. It doesn't say anything.
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.
Yes, but that's what the safe harbor clause is for. If a user uploads something, the site owner is not liable provided they comply quickly with takedown requests. It's why YouTube can allow users to upload videos, and a similar principle is the reason 4chan is still in existence despite the hundreds of thousands of child porn pics that have been uploaded to it.
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.
My own experience anecdotally disproves your last statement entirely, but the case against freely available music 'obviously' being bad for music labels and artists doesn't' end there.
And let's bring the crusade against the VCR while we're at it: http://eightiesclub.tripod.com/id408.htm and then, move on to how rented videos became a source of greater profit for studios than theaters.
I, personally, buy music that is available on Grooveshark. I can think of several Bands I discovered on Limewire way back ended up benefiting from my becoming a long-term fan, attending several concerts, and purchasing many albums... which never would have happened if all I had was 30 second samples on Amazon, for example.
Next, Grooveshark is absolutely not a 'company formed to exploit a legal technicality, nothing more' - they are a pioneering company bucking the ridiculous status quo.
To top it all off, I'm a working musician. Have a nice day.
My experience, anecdotally, is that I haven't met a single person who bought a song that was available on grooveshark. We even share accounts so that we can create playlists for shared tastes, to save each other the trouble of looking up songs that we don't want to pay for.
Have you considered that being a working musician may be why you are willing to pay for music that is otherwise free?
There you go, you've met me! I've bought a song that was available on Grooveshark. Not sure why this would be unusual, but my reasons would be
a: you can't count on a given album remaining on grooveshark forever
b: streaming is not as convenient as having a real file
c: I genuinely appreciate music and want to support my favored semi-obscure musicians
d: albums on GS may be incomplete or lower quality
e: I don't have an issue coming up with $10 here and there
This may be related to my personality and experiences but I don't think it's related to my income sources (which are not solely music of course).
I mainly use GS to discover new music, and listen to mixes and live shows which are not for sale.
> I mainly use GS to discover new music, and listen to mixes and live shows which are not for sale.
Do you think this is a mainstream position to hold? See, I'm not an audiophile, I don't often go to concerts, and neither are anybody I know in real life. We just listen to music because it's nice. Do you think people like me actually are buying music in droves, and I'm just an outlier? Because from my perspective, people who like "semi-obscure" bands and people who want to pay for stuff not on groove shark are by far the minority.
I'm not an audiophile, I don't often go to concerts, and neither are anybody I know in real life either. I don't even spend that much on music, probably only 10-15 albums a month.
A lot of people use Youtube as their radio, and basically I see Grooveshark as doing the same thing. Why be forced to stream a video when you just want to hear the audio?
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.
Yes, there's been tons of YT interfaces over the years, but for some reason I always go back to youtube.com. I didn't know about downloading the mp3. I think that'd be against YT's terms, although I would like to be able to access a vid's soundtrack and not be forced to dl the video.
The innovation is really about labeling YT vids with the correct metadata automatically, rather than manually. In fact, YT should be connecting its music and artists to Musicbrainz already upon upload. It's about connecting artists and songs on yt to their corresponding pages on MB,
So you could take your local mp3 collection, tag it, save as a playlist, delete all the files and then access all the music on site from YT via the playlist.
I think the best way to operate such a system without YT involvement would be to have a browser plugin that fingerprints and tags YT music vids as they're played in the browser, there'd have to be some interaction, but as a distributed effort, you'd gradually build up a yt-mb database.
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.)
I've been wondering how Grooveshark's existence was even possible. I assumed they just hadnt been messed with yet by content owners, and that was why it was still around. Maybe that's about to change.
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