If you’ve read a news story about Grooveshark, the Web-only music streaming service, it’s likely that you’ve heard it described as “legally questionable."
Since Grooveshark’s launch eight years ago, the company has locked horns almost continually with lawyers from all three major American record labels over the fact that it doesn’t have licenses for most of the music it streams to its users.
Grooveshark’s defense has been that it can’t be held responsible for the music that users themselves upload to the service – but in January, the company will shift gears by launching its first totally legal service.
The company is getting ready to introduce Broadcasts, a Pandora-like subscription app that a Grooveshark spokesman described as the company’s “first compliant app,” according to The Wall Street Journal. Broadcasts will charge users 99 cents a month for unlimited commercial-free listening, giving them access to music playlists curated by other users. Broadcasts will also let customers text message each other from the app.
Given that there’s no love lost between Grooveshark and the record companies, how is the company getting the licenses to provide this service? Grooveshark says it’s taking advantage of standard royalty rates set by the government – the same rates that Pandora and similar services pay. That means Grooveshark doesn’t need to negotiate directly with Universal, Sony, and Warner for the rights to play music from their catalogs, the way Spotify and some other streaming services do.
Broadcasts will be available for iOS and Android devices, which in and of itself is a big win for Grooveshark – the company’s previous apps were pulled from both stores after record labels complained that customers were using Grooveshark to pirate music. Grooveshark’s main Web service, which is still mostly licensed in spite of a major copyright judgement against it earlier this year, will be kept separate from Broadcasts. The Grooveshark Web service is supported by advertising, although users can pay $9 a month for unlimited, ad-free streaming.
In an interview with the Journal, Grooveshark chief executive officer Sam Tarantino said the company is doing everything it can to be “a legitimate player” in the music-streaming arena, and that Broadcasts is essentially a response to requests from record labels that Grooveshark rethink its business model. Mr. Tarantino added that he still hopes to obtain licenses from Universal, Sony, and Warner for the Grooveshark Web service, as well. (The multiple suits those companies have brought against Grooveshark might make that an unlikely outcome.)