Music streaming service Grooveshark has ended its operations in Germany, citing the German music rights organization GEMA's "unreasonably high" licensing costs as the reason for its shutdown in the country, according to multiple reports.
However, GEMA denies that there have ever been any negotiations with Grooveshark. In a statement to Billboard, GEMA said "Grooveshark did not end its services in Germany due to high operating costs, as it reported on its web site and in the media. Grooveshark is generally refusing to pay any remunerations of any kind."
Grooveshark hasn't been able to stay out of the headlines lately, with a recent lawsuit by EMI over royalty payments making it a perfect four out of four of major U.S. labels that are suing the company, with Warner, Sony and Universal all filing a joint suit alleging copyright infringement. Grooveshark maintains that it complies with DMCA restrictions, but the labels are less than impressed with its efforts to keep copyrighted material off its site.
Grooveshark's dispute with GEMA resulted in the site posting a message directing all issues users may have to the GEMA web site, according to Gigaom. Grooveshark is not the first web site that has had a run-in with GEMA; earlier this year, a dispute with YouTube over copyright infringement caused the organization to block many YouTube videos in Germany, resulting in a lawsuit in a California court over the same high licensing costs. Just last month, GEMA was able to reach agreements with iTunes Match and BITKOM over music licensing concerns.
In response to Germany's music streaming regulatory environment, Grooveshark.com has begun referring visits from German IP addresses to simfy.de, a music streaming service similar in function to Spotify. "The goal of the agreement is to provide German music fans with continued streaming access to the songs and artists they love. We are excited to share our service with Grooveshark users in Germany and provide an uninterrupted stream of great music," said simfy CEO Gerrit Schumann in a statement to Billboard. "That opportunity comes with great responsibility to delight users and we're committed to do just that".
By visiting simfy.com or using the simfy Dektop Player, music fans can access over 16 million streamed songs, listen to music, create playlists, and actively network with other fans via social networking sites. Mobile applications also allow users to comfortably listen to music on their smartphones. The site is financed through advertising and a flat rate for music.
The big question this raises for Grooveshark is how long the company can continue to operate in other countries, particularly the United States. With lawsuits by all four majors brewing, it might not be long before Grooveshark faces similar challenges in the U.S. as it has in Germany. The streaming service seems determined to stay the course here in the face of so much pressure, recently putting out a mobile app despite having its previous iPhone app kicked to the curb by Apple. So far, Grooveshark has remained resolute, but with road blocks continuing to mount, it remains to be seen if they can continue for much longer.