Don't be seduced by the convenience of Grooveshark. If you want a streaming service that pays musicians, choose Spotify
When Spotify decided to limit its free ad-funded service earlier this year, a friend of mine said she was considering switching to Grooveshark ? she couldn't afford the unlimited ad-free version of Spotify at �4.99 a month (though I pointed out the vodka and tonic she was drinking at the time was more expensive). She did have her reservations, however: Grooveshark placed no limit on how much you could listen to, and ads were much less intrusive than those on Spotify, so could it really be a legal service? Let's take a closer look.
Grooveshark calls itself a radio though, of course, it's not. It's an on-demand service, which makes it more like Spotify than Pandora. If it was an online radio it would have to adhere to the US blanket licensing agreement Pandora adheres to and pay for all the music used on the site. Though Pandora pays artists and songwriters less than Spotify, it does have a licence for all music on its site ? Grooveshark does not. In fact, Grooveshark, which launched in 2007, only has a licence agreement with EMI as far as major labels are concerned. It also has a licence agreement with Merlin, which represents many independent labels, though, notably, both of these agreements only materialised after EMI and Merlin took legal action against the site over copyright infringement. Yet a quick browse shows all of Lady Gaga's catalogue (a Universal artist) and all of Beyonc�'s (a Sony artist), as well as numerous independent artists I know who have never even been approached by Grooveshark, much less ever seen a penny from them. It's an interesting way of doing business: don't bother about the rights for music on the site until the copyright owner takes you to court.
But Grooveshark, which is owned by the Florida-based Escape Media Group, argues it's covered by the the US Digital Millennium Copyright Act (DMCA) ? though the fact that Google took the Grooveshark app off its Android phones indicates that even Google, a company familiar with the restrictions imposed by DMCA owing to its ownership of YouTube, may not be wholly sure of that claim. And while Michael Robertson, the founder of MP3tunes, argues that the recent ruling in the case where his service was taken to court by EMI could work in Grooveshark's favour, Universal disagrees. The label is taking Grooveshark to court in the US, as are a group of musicians and songwriters in Nashville.
The EMI v MP3tunes ruling said the service was covered by DMCA "safe harbour" provisions ? which protect internet service providers from liablity for the actions of their users ? as long as it responded quickly to DMCA takedown notices and removed the accounts of persistent infringers (as with YouTube, the music on the site is uploaded by users, so a track can easily be uploaded again as soon as it's been taken down). The problem with Grooveshark's argument is that the DMCA is applicable only in the US, while Grooveshark is available in Europe, where there is no equivalent to the DMCA.
Though Grooveshark has licence agreements with some of the labels whose artists feature on the site, it's also required to have such agreements with the songwriters behind the tracks (as well as paying them royalties), yet PRS for Music ? the British performance rights society for songwriters ? does not have a licence agreement with Grooveshark. I'm a member of the Swedish performing rights society, STIM. As I've never seen any royalty reports from Grooveshark, despite seeing songs I've written on its site, I asked if there was an agreement in place. There isn't. In fact, STIM's view, as stated in a blog, is: "Grooveshark is an illegal music service in the whole of Europe. All their revenue from advertising and subscriptions goes straight into the owners' pockets."
What was even more surprising to STIM and its songwriter members was that a Swedish PC magazine had recently written an article with the headline: "This is how you get music for free with the cool Grooveshark", which stated the cite was legal and ad-free. The article was not only wrong about the ads (the site features ads and actively looks for advertisers, boasting about the 20 million users it has worldwide), but, STIM said it's completely illegal, "as opposed to Spotify, which has been legal from day one". STIM's blog said: "Grooveshark doesn't want to negotiate with anyone in Europe and does not have the right to make available music in any European country ? Grooveshark steals money from music creators."
When sites such as Digital Music News publish articles headlined "Where Grooveshark Is Still Kicking Spotify's Butt", they fail to take into account that the majority of artists on Grooveshark don't get a penny and have not given their permission for their music to be on the site.
So what did my friend do? After giving it some thought, she decided �4.99 wasn't too much to spend on the artists she loves ? possibly because she works for a newspaper and realised good content costs money to produce.