On Sept. 30, Grooveshark seemed all but sunk when a Manhattan court ruled in favor of Universal Music Group (UMG), which first sued the music streaming service for copyright infringement in 2011. With damning evidence including emails from Grooveshark executives ordering their employees to illegally upload songs (lest they end up on a “shit list”), the judge stated in his opinion of Grooveshark’s parent company Escape Media Group, "Escape engaged in purposeful conduct with a manifest intent to foster copyright infringement." Indeed, the Gainesville, Fla.-based Grooveshark -- which is loaded with both legal and bootlegged material -- has been sued at least once by every major label group, sometimes multiple times.
And while some sources say UMG and other majors are holding out a shred of hope that the remarkably resilient company will finally become legitimate, "I don’t see how they’re going to recover from this latest ruling,” says one well-placed source. "It's over, particularly since the founders were held personally liable." The source admits a disconnect between suing Escape for “stealing millions of artists' content" and labels entertaining discussions about helping co-founder/CEOs Sam Tarantino and Josh Greenberg, both 27, secure licensing deals. In the past, Grooveshark has been an unreliable, unrepentant business partner: EMI sued Escape three separate times for breach of contract and unauthorized use of the label's recordings in 2012 before the two parties arrived at a settlement and licensing agreement in 2013. In that case, Grooveshark blamed EMI’s “unsustainable” streaming rates and its “monopolistic” merger with UMG for the termination of their relationship.