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Piracy Music The Courts

Grooveshark Shuts Down 226

An anonymous reader writes: Grooveshark, one of the most popular music streaming websites, has announced that they are shutting down immediately. Several lawsuits from the record companies pushed the company out of business. In a notice posted on the Grooveshark website, its two founders said, "[D]espite best of intentions, we made very serious mistakes. We failed to secure licenses from rights holders for the vast amount of music on the service. That was wrong. We apologize. Without reservation." All of their music has been deleted, and the site itself now belongs to the record companies. NewYorkCountryLawyer adds that according to the settlement (PDF), Grooveshark must pay $50 million, but no money judgment has been entered against individual defendants.
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Grooveshark Shuts Down

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  • by NotDrWho ( 3543773 ) on Friday May 01, 2015 @08:35AM (#49592691)

    Best I can do now is a shark that can slow dance. It's just not the same.

  • Best of intentions (Score:4, Insightful)

    by Anonymous Coward on Friday May 01, 2015 @08:37AM (#49592711)

    Despite best of intentions, we made very serious mistakes. We failed to secure licenses from rights holders for the vast amount of music on the service.

    Huh? Surely it can't be best of intentions if you publish music on your service for which you know you don't have proper licenses.

    • by fuzzyfuzzyfungus ( 1223518 ) on Friday May 01, 2015 @08:43AM (#49592763) Journal
      Anyone with some legal experience able to clarify this? Given that grooveshark wasn't...exactly...apologetic about their strategy(nor has it changed all that much), my assumption is that the sudden shift to grovelling-apology-mode has much more to do with losing than it does with any change of heart.

      Do courts give grovelling apologies enough weight that this 'contrition' is a logical strategy to try to reduce any awards of damages? Are such apologies sometimes added as conditions of a settlement, presumably so that the victor can grind the vanquished further into the dirt? Is there some other advantage to issuing one?
      • If it was settled out of court, then it is up to the company they settle with. "You can have the website" "We will apologize" "We don't have any money" "Will you leave us alone now?"
      • by Jason Levine ( 196982 ) on Friday May 01, 2015 @09:02AM (#49592943) Homepage

        Well, if the site itself belongs to the record companies now, the "apology" might be the record companies speaking for the people who originally ran Grooveshark rather than those people being seriously apologetic for their actions.

        • by i.r.id10t ( 595143 ) on Friday May 01, 2015 @09:08AM (#49593001)

          This is a local-to-me company and I casually know one of the founders/owners. Since the message isn't "signed" and doesn't have a name attributed I can't say for sure if you are right or wrong... of course, even with his name on the message, it wouldn't be a "for sure" thing...

      • Do courts give grovelling apologies enough weight that this 'contrition' is a logical strategy to try to reduce any awards of damages? Are such apologies sometimes added as conditions of a settlement, presumably so that the victor can grind the vanquished further into the dirt? Is there some other advantage to issuing one?

        I'm not a lawyer, but as an informed layman I can only point out that in some/many/most cases, juries and not judges determine damage awards. Based on the juries I've served on, I can tell you that a rather large amount of people on a jury don't know anything about technology and thus tend to see this kind of thing in real black and white terms where they overvalue the "damage" that the defendant does. I've never served on a jury where this strategy would have made any difference in the damage awards, but

      • I think more important is that they gave up all their own intellectual property to whomever.

        My guess is that they were required to do this as part of settlement, and the hope on the other side is that somehow grooveshark users will be swayed to change their behavior based on this statement.

        As regards the statement itself, it appears crafted by a gifted communications expert, but the smell of PR/inauthenticity is not completely masked. Or, it was crafted by the groovesharks and encoded with a little Wayne's

      • Anyone with some legal experience able to clarify this? Given that grooveshark wasn't...exactly...apologetic about their strategy(nor has it changed all that much), my assumption is that the sudden shift to grovelling-apology-mode has much more to do with losing than it does with any change of heart.

        I'm pretty sure the apology has a hell of a lot more to do with the transfer of control of the domain name to the record label than it has to do with the actual opinions of Grooveshark, or really, anyone who was employed by them, since whatever statements are up currently are hosted on RIAA owned servers on a RIAA owned domain, and likely dictated to RIAA employed web masters by RIAA marketing executives.

        I don't think anyone at Grooveshark would willingly admit legal liability so blatantly, unless they had

      • by Holi ( 250190 )
        What courts, there was a settlement.
  • Wait what? (Score:5, Insightful)

    by kthreadd ( 1558445 ) on Friday May 01, 2015 @08:40AM (#49592727)

    We failed to secure licenses from rights holders for the vast amount of music on the service.

    But you still continued? Good plan there.

    • by guruevi ( 827432 )

      The company was taken over by the music industry, any statements and actions are thus by the record companies who're sending a clear message they don't want a streaming service.

    • by Rinikusu ( 28164 )

      Maybe they should've claimed they were just tunes-sharing. Like Uber.

  • [D]espite best of intentions, we made very serious mistakes. We failed to secure licenses from rights holders for the vast amount of music on the service

    How is it that if I shared that many songs with that many people without authorization I'd be fined literally trillions of dollars, but they get to walk away like this? Very odd.

    • Re:K Bye. (Score:5, Informative)

      by Richard_at_work ( 517087 ) on Friday May 01, 2015 @08:46AM (#49592807)

      Who said they are getting to walk away with just an apology? Their statement includes:

      “As part of a settlement agreement with the major record companies, we have agreed to cease operations immediately, wipe clean all of the record companies’ copyrighted works and hand over ownership of the website, our mobile apps and intellectual property, including our patents and copyrights.”

      Note the "as part of a settlement agreement ..." part - which indicates that shutting down operations isn't the end of it for them.

      • Re:K Bye. (Score:5, Insightful)

        if the music companies were smart, they'd continue to operate the site

        "we shut down the pirates! that will end this threat once and for all!"

        (two weeks later, 20 more sites)

        it should have been:

        "this is a popular site. now that we own it we will modify it slightly so that we derive some revenue from it while not pissing off the listeners, thus gracefully transitioning to a new distribution model that listeners desire"

        • by Junta ( 36770 )

          I agree that the more intelligent thing would have been for the site branding to be used for legitimate service rather than trying to shame the users while pointing out other services and hoping for the best.

          However, the likelihood that they could have modified it 'slightly' while 'not pissing off the listeners' is pretty slim. The music selection would have had to be torched and started over from scratch (too many content owners without an agreement between them) and something would have had to give to ac

          • true

            i still feel there is a more nuanced solution to these situations where more benefit is derived

            just turning the power switch off seems like a waste of value, however damaged

            • by tnk1 ( 899206 )

              They don't want to operate Grooveshark. They just want to make sure that no service operates where they don't get paid. They're being paid by Spotify and the other services. It's Spotify and their ilk's problem to operate a streaming service. The *industry* doesn't care, since a lack of streaming just means they can go back to making sales on CDs.

              • The *industry* doesn't care, since a lack of streaming just means they can go back to making sales on CDs.

                that will never happen again. customers will share files online

                but in your sentence is exactly the stupidity that shows why the music industry is dying. for not embracing the technology where their customers are

        • by tnk1 ( 899206 )

          Can't really do that or they legitimize this model and Spotify and all the rest start jumping on the bandwagon and the publishers start losing their juicy cuts of those services.

      • by Kjella ( 173770 )

        Note the "as part of a settlement agreement ..." part - which indicates that shutting down operations isn't the end of it for them.

        It might not be all of it, but I'm pretty sure it's the end of it. Nobody settles half a case, particularly not when you bend over like this. The only reason Grooveshark would agree is if they got an exit opportunity where they could fold their hand and walk away from it, presumably because the other side's lawyers found there was nothing more to be gained from the company and piercing the corporate veil or pursuing criminal convictions wasn't possible or not worth it.

    • by Overzeetop ( 214511 ) on Friday May 01, 2015 @08:49AM (#49592839) Journal

      Except without all that silly permanence when things go wrong.

      As long as the founders played the corporation game right, they have no personal liability at stake. A corporation is just like a person, except that when a corporation violates a law which would burden it for life, or financially destroy it, it magically disintegrates leaving the real people who ran it into the ground clean and unencumbered by their wrongdoing.

      There are good reasons for the existence of corporations; this isn't one of them.

      • by minkie ( 814488 )

        That's the most common outcome, but it doesn't always work that way. It is possible for the court to hold the corporate officers or investors personally liable. It's called piercing the corporate veil. Doesn't happen too frequently, but it happened to Limewire (http://blog.ericgoldman.org/archives/2010/05/limewire_smacke.htm), who played in the same space, just a few years ago.

    • by cdrudge ( 68377 )

      How is it that if I shared that many songs with that many people without authorization I'd be fined literally trillions of dollars, but they get to walk away like this?

      Because you aren't a incorporated company. Individuals in management might get to walk away, but the company and all it's assets (if any) doesn't.

      • I've always wanted to incorporate myself. You hired Colin Castro LLC not Colin Castro Person, sorry, you have to sue the LLC, I was driving as a company, not a man.
    • Re:K Bye. (Score:5, Insightful)

      by Junta ( 36770 ) on Friday May 01, 2015 @08:56AM (#49592893)

      They didn't quite get to 'just walk away'. They were given a choice, an impossibly high fine to pay or hand over all their patents, copyrights, infrastructure, software, basically everything while very publicly scraping the ground about how wrong what they did was.

      Essentially, they had something of value that was interesting to the plaintiffs that was bigger than their realistic chances at getting actual money out of them.

    • IANAL but I believe since Escape Media Group [manta.com] is incorporated they can fine the company but not the employees/owners of the company. To get anything from them they would have to pursue them separately.
      • by tnk1 ( 899206 )

        You can get at the owners in certain circumstances, and it is likely that rolling over at settlement probably was the line where further fighting would have started exposing the owners to actual liability either from the fines or investor lawsuits and such.

  • Grooveshark let users to listen to the music the users payed for.
    When you pay for music, you neither own the music, the media, the files or even the right to listen to it where you want.
    You should have known it was too good to be true.

    • FTFY (Score:2, Informative)

      by Anonymous Coward

      Grooveshark let users to listen to the music the users payed for and all music ever uploaded to Grooveshark even if they didn't pay for that music.

      There. FTFY.

  • If you neither sung it yourself, nor obtained the singer's permission, you have no right to play it. Seems like a perfectly self-evident rule to me.

    • by cdrudge ( 68377 )

      Anymore isn't it if you didn't compose the music, write the lyrics, and then perform both, all while using a series of words, notes, and/or chords that have not been organized in a similar fashion, either as an entirely or as smaller subsets, then you have no right to think about it in a public space.

  • And I'm sure all the artists are rejoicing in the victory that they'll financially benefit from handsomely!!!
  • As an occasional substitute DJ, this will impact me. I use Virtual DJ software package; it uses GrooveShark as a primary music service. (It also scours the web with their own service that isn't as good.)

    (Without reading all of it...) It looks like the judgment cites digital distribution, which is generally covered by SoundExchange. SoundExchange generally covers the type of license (statutory) that covers the media or streaming rights. Whereas the performance rights (BMI, ASCAP) cover the performance ri

  • ...because I spent 1.5 years of my life @ MP3.com running reports and collecting data as discovery for the lawsuits of record companies, publishers, individual artists, and whomever owned any percentage of any playback rights in any country (and yes this means people who owned less that 1% of a song's rights in Turkmenistan).

  • by pushing-robot ( 1037830 ) on Friday May 01, 2015 @09:51AM (#49593379)

    I'd love if they could start a new company that pays royalties, Spotify-style, where it can, yet allows users to share rare or otherwise unavailable content as well. Because of the mess of regional rights ownership there will probably never a fully legal way to enjoy all music worldwide, so a gray market will always be necessary to fill the gaps.

    In the meantime, I'll sing a song [youtube.com] for them.
    (...and good luck downloading that legally, US slashdotters)

    • It does not appear to be available from Google Play. However, in the US, it is perfectly legal to grab the Youtube video, so there is that.

  • by Connie_Lingus ( 317691 ) on Friday May 01, 2015 @10:32AM (#49593771) Homepage

    they forgot the lasers

  • A streaming service that offers more than the usual EU/US crap had to end sooner or later. This seemed to be pretty much the only service in the western world with a decent enough selection of Japanese and Korean music.

  • So now that the labels own the website, what will they do with it?!

    They have a crappy reputation for shutting down sites which actually function pretty well in terms of giving consumers what they actually want, and then never reviving them again.

    Wouldn't it make sense for the labels to operate these things? Why don't they? It's been over 15 years now.

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