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Friday, January 6, 2012

Grooveshark online music streaming faces more troubles

By Pankaj Ladhar of Manos • Alwine P.L.

Back in August we talked about a lawsuit against the Florida based music streaming service, Grooveshark. Grooveshark allows users to upload and share music. One issue however is that those who are uploading the music generally do not have a licensing agreement to share the music. But the site was created by two University of Florida students in an attempt to provide an alternative to the illegal downloading of music. To further this purpose the company has attempted to enter into agreements with record labels to legally use their music.

This has been an ongoing process so far as three of the four major record companies have field infringement lawsuits against the online music provider. The good news, however, had been that one of the four major record companies was not suing them and had actually entered into a licensing deal. But now that company, EMI is suing Grooveshark for breach of contract.

In its lawsuit EMI claims that Grooveshark has failed to provide accounting statements or make royalty payments since they entered into their agreement in 2009. Grooveshark has responded in a statement that it acknowledges the contract dispute but believes that the two sides will be able to come to an agreement to resolve their differences.

It seems that the music industry is still struggling with how to best deliver its music to those who want to hear it while continuing to be profitable. There are some online subscription music services with which the record companies work more closely, but many consumers prefer free services, such as Grooveshark with 35 million users or Pandora. Hopefully online music sites, musicians, fans, and record companies can move towards a system which will allow fans to get their music and those that make the music to also make a living.

Source: Gainesville.com, "New lawsuit means all major labels are suing Grooveshark," Ben Sisario, Jan. 6, 2011


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