I was an occasional user of Grooveshark, and whenever I used the service (which had a brilliant UI, by the way) I found myself wondering how they could still be operating, given that they weren't licensed by the major labels. It felt like Napster in a web app, only more centralized (and thus, easier to take down, one would think).
Well, the answer seems to be that they have been fighting the major labels in the court this whole time (~5 years). Unlike maybe everyone else who has faced up against the major labels, Grooveshark forced them to fight. When the labels didn't give them a licensing deal, and told them to stop operating, Grooveshark responded, "Make us."
They created their tech, built a loyal following, grew their business, all the while fighting this lawsuit. In the end, the only thing that stopped them from pursuing their vision was a judges' order. This settlement seems to be a judge-mediated settlement of only the damages portion of the trial after liability had been established. It seems that the judge ruled against Grooveshark by summary judgement in September, which means they have known for more than 7 months that this was inevitable. They shut down their service 2 days ago.
People have called Grooveshark "shady", and many people believe that their business model was "illegal". Both adjectives may be accurate descriptions. I think the best adjective to describe these guys, however, is "gutsy".
Second:
The front-end system that Grooveshark built, which is the best that I have used for music playback and discovery, is now jointly owned by the major labels. They cannot possibly be short-sighted enough just to throw that away. Will we see Grooveshark resurrected as a label-owed alternative to Spotify, et al? Will they try to maintain any portion of the Grooveshark organization, especially the engineering team? Again, they would be foolish not to try, although maybe I'm giving them too much credit.
> The front-end system that Grooveshark built [...] is now jointly owned by the major labels. They cannot possibly be short-sighted enough just to throw that away.
Uhhh. I'm honestly confused. Is this sarcasm? Because if there's one thing that major labels have demonstrated, it's a willingness to be short-sighted.
I hope that you're logically consistent and also consider other people who make their money by trampling on rights to be gutsy. for instance, gangsters, fraudsters, spammers... all have a similar business model in that they make money by ignoring the legal framework of their chosen business. certainly does take guts!
How are those services trampling on anyone's rights?
Despite loving Grooveshark, I tend to agree that copyright has some meaning and purpose. I don't think taxi companies have a right to business just because they were there first.
The subtext is that they're pushing on and in many cases breaking regulations (on carriage service and short-term tenancy), and also externalizing their costs. I happen to believe that's actually true in both cases, but that doesn't make what they're doing equivalent to building a business on someone else's proprietary IP.
> I happen to believe that's actually true in both cases, but that doesn't make what they're doing equivalent to building a business on someone else's proprietary IP.
Drop the "intellectual" part of "intellectual property" and that's exactly what AirBNB is doing - tenants are literally using property that isn't theirs (they've leased it, but they don't own it)[0] and are making money off it.
And in doing so, they are also impacting others' property rights, since the externalities of short-term tenancy are borne by neighbors, not by the person who lists a whole-apartment rental on AirBNB.
[0] And given how hard the music industry has been pushing the line "you don't own the music you buy; you're only leasing rights to access it" for digital downloads (not just streaming), this isn't really that different a situation.
I agree, but that part of Airbnb's usage pattern is bound to change, and the service will easily survive that change. Grooveshark, on the other hand, can't survive a correction from proscribed uses.
I'd argue that they make it easier for individuals to exercise rights they should have. They're merely centralized listings that make it easy to connect buyers and sellers of services in transport/lodging markets.
Fundamentally, if I own a property I should be able to allow/disallow access to anyone as I see fit, and charge appropriately. If I make money, I'm still obligated to pay taxes on it (therein, I imagine, lie the problems).
So I'd claim that AirBnB and Uber are helping push for more sane regulations which allow free-er markets, while Grooveshark was basically just short of directly-stealing the content of others to profit on themselves.
That said, I'd still rather have Grooveshark than not, because I personally don't care so much about the record-companies rights - but certainly the government should be there to help uphold the rights of individuals and businesses, which, alas, means legal trouble for Grooveshark.
If you buy a property in the middle of residential Oak Park, on a sleepy block lined with bungalow houses, do you have the right to open up a bar in it? How about a 24/7 metal machining shop? A noxious waste processing plant?
Where do we draw the line, and why do we draw it there?
It's not an abstract question: the regs that Airbnb pushes on are society's current answer to that question. They're going to change, as I think we can all see, but how far will they change? That's an extremely important and immediately impactful question right now.
Meanwhile, bringing this back around to Grooveshark: copyright is unlikely to change in ways that would be meaningful to Grooveshark.
There is a difference between what you are describing (commercial zoning) and what AirBnB does (length of tenancy). Commercial zoning is much more obviously a legitimate government function than length of tenancy, which is a textbook economic rigidity.
But to answer your question seriously, I think the Japanese have a better zoning system than in the US, theirs allows for, in limited quantities, a bar in a residential neighborhood, or even an apartment next to a machining shop. The insight here is that it does no one any good to have a long commute, and so they have a system that affords landowners choices about the kind of neighbors they want to have, rather than dumping them all into residential-only zones.
So what you're suggesting is that it should be OK for me to buy a bungalow in the middle of Oak Park and literally open up a hotel in it? That's a coherent argument, but not one I think a lot of people share.
I don't know how to answer your question because I don't know what it means to say something "should be OK".
If you're asking if I would prefer to live in an Oak Park where hotels were legal as opposed to where hotels were illegal, of course. If you're asking me if I would be on board with storming into an established community and rewriting their zoning codes over their objections, probably not, although there may be exceptions. If you're asking me if I would sleep well at night while operating a hotel in Oak Park, then I would probably want to meet the surrounding neighbors and decide for myself how much the activity would disturb them, look at the size of the easement, what the noise floor is like, and so on. If you're asking me if I as a homeowner would be annoyed at a neighboring hotel, it's possible, but I'm annoyed at a lot of things, most of which I seek no special right to change.
Those are four answers to your hypothetical, but I don't know whether one of them, or any of them, are the kind of answer you're looking for.
Sure. I think I was fixating on "length of tenancy" as an illegitimate focus for zoning regulation (the implication I took from your comment). But we're pretty far from the original topic of the thread now.
I'm pretty ambivalent about the picture I've gotten of Uber's management but would generally advise against labeling people we don't really know as "sociopaths".
Though, hustling senior citizens with bizarre Wii tennis mastery does make one think.
I think a lot depends on whether you gain or suffer from their services, and also on the coolness factor. Your garden variety extortionist, mugger or trigger man is boring, but articles about drug trafficking using UAVs or microsubmarines tend to gain traction among tech crowd. Uber and AirBnB have just a huge coolness factor - because they have a mobile app! - but generally, it's a typical pattern of "let's make money giving a group of people some value, dumping externalities on someone else, social order be damned".
Without commenting on whether I think "gutsy" is good or accurate in this instance, it's worth saying that copyright is a civil issue, not a criminal issue. AFAIK, the people at Grooveshark haven't been threatening to break anyone's kneecaps...
That's not true at all. Copyright infringement is a criminal issue exactly in cases where it's done with commercial intent, and not just in the USA. It predates both music file sharing and the commercial, public Internet.
This is like saying that McDonald’s and American Apparel share a similar business model in that they make money by ignoring the more obscure commandments in classical Hebrew scripture.
The claim only sounds meaningful to people who subscribe to the particular framework in question. To everyone else it’s trivial.
How good was their business model? They survived for 10 years, including financing what I'm sure were expensive legal battles, but how much of that was from revenue and how much from equity/debt financing?
Grooveshark had a paltry amount of equity/debt financing compared to what's common in the valley. In total they raised a couple million, in the low to mid single digits. Part was equity and part debt financing, which was all paid back and some of the equity was also bought back from investors who wanted out after the lawsuits.
Grooveshark was completely self sufficient for a long time, even with the lawyer bills. What really killed it was the pressure from labels to get them kicked off ad networks, mobile app stores (first Apple, then Google), and prevent the more lucrative direct ad deals you need to really survive. Once the summary judgement occurred is when it really started becoming impossible.
Disclaimer I was an early employee that worked there for 5 years.
It's really unfortunate that they were taken down. Sure, there exist paid services like Spotify, but when there's only licensable content you miss out on all weird obscure stuff that Grooveshark had, like video game soundtracks, chiptunes, and international music not licensed abroad.
If only every one of these large record labels could just instantly go out of business, simultaneously. That would be wonderful...
I'd be perfectly happy to pay for music streaming like I pay for Netflix: unlimited access for a flat monthly fee. However, I'm not willing to pay for a monthly service from every individual record label I want to listen to, and still miss out on content I want.
Unfortunately, I don't think it's very likely that a paid service which behaves in a more legitimate way than Grooveshark can really have all of the content in one place, because of all of the agreements necessary.
For some reason I don't mind Netflix having only a subset of TV shows and movies, but I would mind a music service that doesn't have a nearly-complete catalog of everything I might want. I don't want to have to care what label owns the tracks. Perhaps I'm just spoiled by having Grooveshark for so long.
Isn't that a weird thing to say? You pay for Netflix. Far more so than for Spotify or Rdio, you miss tons of content, so much so that there are regular columns on Slate about what good movies are coming and going from the service every month. Netflix has extraordinarily spotty coverage; it's like a version of Spotify where they have Pixies albums, but only every other song from the albums.
The difference in entitlement (I don't mean that as a loaded term) between music and video services is interesting to me.
Perhaps it has something to do with decades of TV being available over the air, and over different varying cable packages. People are used to the idea that if you don't pay for cable you can watch a subset of TV shows, and if you do pay for cable, you're only buying a subset of the channels.
Music has always been free on the radio, but it works differently. Multiple radio stations might play the same song if it's within their genre. This is in contrast to multiple TV stations which own non-overlapping programming. You can't find ABC programming on CBS, but you can hear the Pixies on multiple radio stations.
To rephrase a little: Television content distribution has always been linked to the owner of the content. The networks that buy the programs distribute them exclusively. Music distribution is often separate from the ownership, and is based on royalties. Anyone can play any music, as long as they pay the royalties. As such, nobody is used to having to think about who owns the work of a certain artist they want to listen to.
My theory continues to be that the music industry is just unlucky. They entered the internet era with a product that was perfectly positioned to be annihilated by Napster, iTunes, and YouTube.
The pop single was a great product in its day. The recording industry invented pop singles and then spent fifty years perfecting the machine to market them.
To focus the marketing, singles were released a few at a time, and radio stations were encouraged [1] to play the same small playlists relentlessly, over and over, day and night. We all got used to the fact that there were only a few hundred songs on the radio and that they weren't merely free, but inescapable.
To further focus the marketing, the audience was relentlessly diced into genres, and high walls were built between the genres. Sorry, no hip-hop here, this is a rock station; Sorry, no zydeco here, this is a country station. We all got used to the fact that each of our local radio stations had a sound that never changed, and that you could name the songs that would be playing in a bar before you walked in. (Hint: Hotel California.)
For a while there, bands would release carefully-crafted albums that were designed to be listened to in a sitting, but the radio would never play whole albums except on very special occasions. Also, long songs would generally be abridged or avoided. We all got used to the fact that music came in randomly-shuffled three-minute chunks, which just happen to be really quick to download and easy to stuff onto USB sticks.
Then Mephistopheles appeared, holding the first compact disc, and the industry's doom was sealed as it realized that it could make an easy fortune by selling the baby boomers' music to them over again in a new format. And, indeed, that fortune was made. The industry's focus shifted to the past, and parked there. They made a lot of money selling copies of Rumours and Dark Side of the Moon to multiple generations of listeners, and they invested in branding juggernauts like Madonna and Michael Jackson that promised to sell albums for the next fifty years, and we all got used to the fact that one could pick up a copy of Rolling Stone and have difficulty figuring out which year it was from.
Plenty of people complained about this system at the time, but it did make money. Until Napster and Apple came along and said "Hey, your entire musical universe fits inside a small box like this, would you like one? It won't take more than a week to build a collection that is better than the radio." And then, whoops, the meteor hit the dinosaur right between the eyes.
Don't get me wrong, I own and rather like Rumours, though I cannot spell it. It helps that, after spending a decade mostly not listening to classic-rock radio, I can hear the thing with fresher ears.
I'm curious to know what will happen with all the user data on their systems. There was a site floating around which allowed you to access your playlist information just by entering your account email. I assume that was old public data.
And with services like this, is there any threat to users who access 'illegal' material?
Good point. People discussed different ways to get to the parts stored in localstorage, but that obviously only should work locally. Since Groovebackup got shutdown as well we can't check what they did.
I find it interesting that by virtue of point 5, they are not allowed to open source anything related to Grooveshark. Unless I'm interpreting it wrong.
Can anyone comment on the potential implications for Apple iTunes, Google Play Music, and Amazon Prime Music? Each of these services allow users to upload content from their personal libraries. As far as I know, these services make no technological effort to assert the users' ownership of the content. Rather, I assume their Terms of Service mandate content ownership prior to uploading. Do their TOSs protect them from the complaint levied by the Plaintiffs in the Groovershark case stating that Groovershark was: "liable for direct and secondary infringement of certain of the Plaintiffs' copyrighted works;". Was Grooveshark's TOS materially different than that of the services mentioned above?
If I were to illegally upload a copyrighted work to Prime, iTunes, or Play; would I expose the parent companies to any liability or is the legal onus entirely on me as the user infringing on the TOS?
From what I understand those 50 millions will only be paid with assets from grooveshark. If groovershark the company doesn't have assets to cover the 50 million they will not get paid and also can't get paid from the individuals.
There have been large settlements in the past that turned out to be false. They want a high number for shock value, but nobody's actually paying it. (There was something to that effect in the sony docs iirc.) See: Hotfile, Isohunt, etc.
Keep in mind that the founders were also sued personally (it's a common tactic by the labels). The leverage of the settlement was to keep the entirety of the 50M due within the company and not be personally liable as individuals for the amount (for life).
I'm confused, didn't Grooveshark just provided aggregation and a streaming player with playlist management? The music was not hosted by Grooveshark right?
I remember reading that after rights-owners requested certain songs taken down, Grooveshark employees would re-upload them to the service. This made them lose safe-harbor provisions for hosting third-party content.
First:
I was an occasional user of Grooveshark, and whenever I used the service (which had a brilliant UI, by the way) I found myself wondering how they could still be operating, given that they weren't licensed by the major labels. It felt like Napster in a web app, only more centralized (and thus, easier to take down, one would think).
Well, the answer seems to be that they have been fighting the major labels in the court this whole time (~5 years). Unlike maybe everyone else who has faced up against the major labels, Grooveshark forced them to fight. When the labels didn't give them a licensing deal, and told them to stop operating, Grooveshark responded, "Make us."
They created their tech, built a loyal following, grew their business, all the while fighting this lawsuit. In the end, the only thing that stopped them from pursuing their vision was a judges' order. This settlement seems to be a judge-mediated settlement of only the damages portion of the trial after liability had been established. It seems that the judge ruled against Grooveshark by summary judgement in September, which means they have known for more than 7 months that this was inevitable. They shut down their service 2 days ago.
People have called Grooveshark "shady", and many people believe that their business model was "illegal". Both adjectives may be accurate descriptions. I think the best adjective to describe these guys, however, is "gutsy".
Second:
The front-end system that Grooveshark built, which is the best that I have used for music playback and discovery, is now jointly owned by the major labels. They cannot possibly be short-sighted enough just to throw that away. Will we see Grooveshark resurrected as a label-owed alternative to Spotify, et al? Will they try to maintain any portion of the Grooveshark organization, especially the engineering team? Again, they would be foolish not to try, although maybe I'm giving them too much credit.