Is Streaming Service Grooveshark Finally Dead in the Water?

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.

Judge Rules Against Grooveshark in Summary Judgment Case

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.

Escape also has claimed protection under the Digital Millennium Copyright Act’s “safe harbor provisions,” which allow such services leeway to remove infringing content once notified if employees and officers had been previously unaware. Since the most recent decision confirmed that Grooveshark staffers had uploaded 5,977 tracks and streamed those copyrighted sound recordings 36 million times in violation of performance rights, the service was ruled ineligible. Elsewhere, the CEOs also seem to disregard their past transgressions: Tarantino insists this criticism concerns Grooveshark circa 2008, when users could download and upload songs freely, and he claimed the download function had been disabled. But as of Oct. 8, it was still possible to download songs with a browser plug-in that appears as a “download” link next to the song.

UMG Calls for Summary Judgment Against Grooveshark

Tarantino tells Billboard through a representative (repeated requests to speak directly with Tarantino and Greenberg over the phone were denied) that he plans to appeal and that the company operates “with strict DMCA compliance,” blaming the download capability on unauthorized “third-party programs.”

Indeed, some say that such tactics have been the key to Grooveshark’s survival: avoidance, dodging paying royalties, cutting staff and the sheer length of the litigation process — one reason that peer-to-peer network Limewire survived four years of trials before it was shut down in 2010. “If there’s one thing Grooveshark’s continued existence tells us,” says a representative from the RIAA, “it’s that the wheels of justice turn slowly.”

This article first appeared in the Oct. 18 issue of Billboard.