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.
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