Grooveshark’s business model is a bit dodgy.

by Calvin Robinson on October 27, 2009.

I have been a member of Grooveshark since they first launched, so this post is in no way biased towards Spotify, regardless of the fact that Spotify has been the subject of 4/5 posts lately.

Grooveshark started out as something really interesting. It was a peer-to-peer music sharing platform with a difference – legality. You had a little system-tray widget installed on your computer, which would gradually upload your enitre music library to Grooveshark’s servers. Users could then purchase these tracks from Grooveshark, who would give you a cut (we’re talking pennies here), and pay the royalties, making the whole thing quasi-legal.

However somewhere along the lines the business model switched. They started to focus more on the music player, than the sharing software, or the p2p aspects. They launched a “Grooveshark Lite”, which was simply a player, to browse the hundreds of thousands of tracks being uploaded by their uses in the hopes of making some spare cash. This ‘Lite’ player was optional, a subdomain of the actual Grooveshark site.

Eventually the original site was dropped, and Grooveshark ‘Lite’ became the default website. I’m not sure exactly when this happened, but somewhere along the lines Grooveshark stopped being about p2p and become a music streaming service. A player. Think Spotify but in a web browser. This was interesting, because all the music in the library was uploaded by users in the hopes of sharing it with other people in return for cash.

The music was still being shared with the masses, all be it in a streaming sense. Grooveshark were slightly ahead of their time with this move, which is something other companies have done much better in more recent times. Spotify for example went straight to the labels for their music. Grooveshark ’stole’ the music off their userbase, then were surprised when the labels wan’t nothing to do with them – and still don’t, if their own PR is to be believed. Grooveshark now make money from big ads on the site and VIP signups (to remove the ads), since they no longer take a huge cut from the purchase of songs.

What really struck my nerve, is the fact that Grooveshark had the audacity to send me a harsh e-mail threatening to ban me from the website, after they had received a DMCA cease-and-decist regarding a couple of my tracks. So not only do they steal or my music under false guises, but they leave me responsible for them publishing the music on their new site. Ridiculous!

A few months later I received this followup e-mai;

Hi Calvin,

You may remember a few months ago, we wrote to let you know that some music files you uploaded to Grooveshark had to be removed from the website. In it, we also mentioned that if any other content were uploaded from the same Grooveshark user account, said account would be suspended.

This is just to let you know that we’ve revised our policy for the better–your Grooveshark account is in no jeopardy whatsoever, and all of your information remains unchanged. We have turned off the ability to upload further new music to Grooveshark for the aforementioned account, but otherwise nothing has changed.

Sorry for any confusion or panic, and keep grooving.

Yours,
The Grooveshark Team

What?! Firstly, I have no way of uploading new music to your website, since you closed down the music sharing part of your website – unless it’s hidden aways somewhere that I’m unaware of. Secondly, I have no wish to upload any more of my music to your website. I uploaded my mp3s to Grooveshark, the p2p website where you get paid to upload, and it ended up on Grooveshark, the streaming service (WITH ADS) that earns Grooveshark money, and I get absolutely no benefit from it.

Grooveshark could not sink any lower in my opinion right now. Oh, and by the way, they’ve launched a new design on their website, making their adverts even more prominent. Lovely for them. This new layout, incidentally, is almost identical to the Spotify client.

There is one good thing about the current Grooveshark, and that’s I can still see all the music I uploaded in my library – which I lost during PC troubles a couple of years ago. I have used this list to re-acquire my lost music. Shame I couldn’t re-download it from Grooveshark, but meh.

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    CalvinThe random rants and babble of an entrepreneur in London. My favourite topics being Linux, Web2.0 and Life.

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