

Universal Music Sues Grooveshark for 100,000 Illegal Uploads - maqr
http://techland.time.com/2011/11/21/universal-music-sues-music-streaming-service-for-100000-illegal-uploads/?iid=tl-article-mostpop1

======
DevX101
Universal doesn't want a settlement or share of ad revenue. They want
Grooveshark gone. A Universal insider was quoted as saying the label has
declared 'legal jihad' against the startup.[1] This was 1 year ago. So they've
had plenty of time to build their war strategy.

Besides, even if Grooveshark wanted to make a deal (I'm sure they do), they
couldn't afford Universal. The vast majority of grooveshark users don't pay,
but just get ads. For the ones that do pay, their monthly fee still pales in
comparison to the value of the hundreds or thousands of songs they've stored
in their account. I've got 300 songs in my GrooveShark. Even if were paying
the $6 per month, it would take 50 months to cover the costs of those songs at
$0.99 each. And during those 50 months, I would have probably added another
300 songs.

The only end game I see here is GrooveShark going out of business. And I say
this with great sadness, because I'm a regular user and love the service.

1\. <http://www.digitalmusicnews.com/stories/090310groovesharkumg>

~~~
betterth
One wonders how Spotify is succeeding where Grooveshark is failing.

~~~
adamcw
Grooveshark did this without inking the necessary deals. If I understand
correctly, their library is provided by their users uploading.

~~~
cookiecaper
Right, Grooveshark's entire business model is centered around DMCA
protections. Only "user-generated content" affords a DMCA safe harbor defense,
so all the copyrighted music they host has to be uploaded by individual users
who each assert that they have the rights to distribute the song.

~~~
jessriedel
Why can't the labels just send mass DMCA takedown letters? Are users really
uploading songs faster than they can be taken down?

~~~
ethank
They have and the tracks pop back up*

*According to the leaked emails.

~~~
jessriedel
Do you have a link to the full story? DevX101's link doesn't say anything
about DMCA takedown notices.

------
physcab
As a former employee of GS I can say that getting sued is nothing new and may
in fact be a good thing for them in a wierd and twisted way. The reason being
is that sometimes (this was the case with EMI atleast) the labels use a
lawsuit to begin negotiations. Getting sued is almost like a stamp of
approval. Obviously I don't know anything about this lawsuit but if they can
outlast the legal costs and emerge with a stronger subscriber base from their
redesign, they'll be ok.

~~~
redthrowaway
I really see this as more of an attempt to kill GS than to extract any value
from them. The music industry is not going to just lie down and accept their
irrelevance; they'll take out as many people as possible with them.

~~~
physcab
You are probably right but this is a war of attrition. There are many, if not
the majority, of industry music types who will act this way, but the old guard
is literally dying away. So if GS doesn't outlast then a new company most
certainly will, it's just a question of when. The power is starting to shift
to the artists anyways, and I predict you'll soon start seeing the music
industry being run by former artists or artist managers. Take a look at Troy
Carter for example, who is Lady Gaga's manager. I'm pretty sure he is an
investor in Turntable.fm.

------
alexhawket
I like Grooveshark's business model.. I think it's one of the most clever of
all the new media companies.

Media is a two way market. Both content owners and buyers must be completely
satisfied for the market to work effectively.

The two problems with labels: 1. they want to get paid alot and 2. they want
to control their catalogs so that they can control their marketing.

The two problems with customers: 1. they want to pay less and 2. they want to
listen to whatever they like.

Grooveshark solves these problems completely. They pay copyright holders to
stream songs on the system and charge customers through ads or fees for the
service.

At the same time, missing songs in the library can be uploaded by users and
they get fairly paid for the "work" from Grooveshark's profits. Content owners
don't have to do any work to seed the system with their content but they get
paid for every stream or download.

So labels save money by not having to manage their content, since, in theory,
it's already been uploaded by users and the crowdsourcers make money "working"
for Grooveshark.

The catalog ends up more complete than labels typically allow and the users
are happier. Everybody wins.

The only problem is that the system only works if the labels give up some
control and they HATE that.

Hopefully Grooveshark survives, I think it has the best shot at finding a
workable path for everyone.

------
rcaught
"UMG is seeking maximum damages of up to $150,000 per infringement from
Grooveshark, which could mean more than a $15 billion payout if the lawsuit is
successful."

Those numbers seem ridiculous. I imagine the only real purpose they serve is
to create fear in similar / emerging ventures and to set an upper bound that
guarantees bankruptcy.

It seems as pointless as condemning somebody to 1000 death sentences.

~~~
101001010111
I think it's safe to assume without digging up legislative history that those
amounts represent a theoretical deterrent, not an estimated measure of lost
profits.

~~~
a3camero
Statutory damages are different from an estimated measure of lost profits.

US copyright act: "the copyright owner may elect, at any time before final
judgment is rendered, to recover, instead of actual damages and profits, an
award of statutory damages for all infringements involved in the action".

Statutory damages in the US are a minimum of $200 per work and a max of $150k.
The minimum is quite the minimum too: "In a case where the infringer sustains
the burden of proving, and the court finds, that such infringer was not aware
and had no reason to believe that his or her acts constituted an infringement
of copyright, the court in its discretion may reduce the award of statutory
damages to a sum of not less than $200".

s. 504 "Remedies for infringement: Damages and profits"
<http://www.copyright.gov/title17/92chap5.pdf>

Also can get lawyer fees under s. 505. So statutory minimum + big legal costs.

~~~
101001010111
Having to defend against claims for damages that do not need to be supported
by any proof of loss is itself a deterrent, whatever the amounts may be, in my
opinion.

Universal's actual losses might be zero but as long as they can prove
infringement and that the defendant (intentionally or not) was an infringer,
they can get a judgment for damages.

Of course winning some copyright litigation and winning the larger battle over
monopolistic control of music distribution channels may be two different
things.

------
purephase
I'm not really surprised. I've always been astounded that Grooveshark (which
is an awesome service, I use it everyday) was able to do what they do.

I figured that the labels were simply building enough evidence to simply
destroy the service outright which will clearly send a message to anyone else
who wants to do something similar.

It will be interesting to see how this plays out.

~~~
benvanderbeek
I agree. I'm a paying customer, I love Grooveshark (and the jailbreak-only
iPhone app that I've missed since switching to the 4S), but it's always been
obvious that it's just a matter of time before they get shut down. I'm
surprised they've lasted this long.

------
gkoberger
I don't understand why the CEO was uploading illegal files. Seems like the
worst possible thing he could have done -- really kills any "we're trying to
provide a legal service; not our fault our users are uploading copyrighted
material" arguments. The safe harbors won't protect them if this is true.

I remember hearing Shawn Fanning say he never shared anything illegal on
Napster.

~~~
andrewfelix
I think the assumption was that the uploading of files to Grooveshark was
covered by the DCMA's fair use clause. I guess he was confident of their model
and its legality.

------
kin
Paying Grooveshark member here, will be sad to see this go. As unorganized as
their service is, their library is massive. Of course, it's obviously illegal
how their library is able to be so massive. I'm hoping I can at least save my
playlists so I don't have to recreate them later off memory.

I would really love it if Spotify could take some UI lessons from Grooveshark.

~~~
baddox
It says a lot about the music industry when any service that is good is
"obviously illegal."

~~~
adgar
Every industry has deals that are too good to be true. Hell, buying stolen
cartons of cigarettes out the back of a truck is "obviously illegal" but
people have done it for centuries. No, I'm not equating copyright violation
with theft - you could say "it says a lot about the software industry that a
site where you could type in the name of a program and download it for free is
'obviously illegal'". Kind of like the vast majority of uses of the pirate bay
are illegal. It doesn't say anything.

------
pork
The sad thing about this whole deal is that Grooveshark is awesome! Nevermind
the fact that a simple Firefox plugin lets you download the MP3 for each song
that you listen to for free...

In retrospect, it's only a matter of time before the labels go all Napster on
their ass.

~~~
kittxkat

        Nevermind the fact that a simple Firefox plugin lets you download the MP3 for each song that you listen to for free...
    

Well, you could've also done that in combination with Youtube instead of GS
(s/grooveshark/youtube).

~~~
esrauch
But the vast majority of videos on youtube are noninfringing, and the vast
majority of music on grooveshark is infringing.

~~~
imrehg
[citation needed]

------
lawnchair_larry
Saw this coming. I am a GS subscriber, but it's quite obviously a streaming
version of napster.

It is really poorly organized like napster was as well - every user who has
renamed a song or used alternate spelling comes up, names that make no sense,
poor quality rips, etc.

------
rick888
This was only a matter of time.

I've been using Grooveshark for a couple of years now and I didn't even know
they were illegal (I figured they had deals with all of the record companies)
until I saw info posted about it here on HN.

~~~
redthrowaway
They aren't technically illegal, as they (in theory) comply with takedown
requests. Now, if GS staff are uploading songs themselves, then the safe
harbor provision of the DMCA doesn't apply and they're in a world of legal
hurt. IIRC, Universal's claim that staff are uploading the songs comes from an
anonymous posting on a message board, so I doubt that claim will hold up if
that's all it's based on.

~~~
skymt
The CNET article[0] says Universal's claim is justified by Grooveshark's
upload database, obtained in discovery during a previous lawsuit.

[0]: [http://news.cnet.com/8301-31001_3-57327815-261/lawsuit-
claim...](http://news.cnet.com/8301-31001_3-57327815-261/lawsuit-claims-
grooveshark-workers-posted-100000-pirated-songs/)

~~~
rick888
Don't they also store all of the uploads?

~~~
redthrowaway
Yes, but that's what the safe harbor clause is for. If a user uploads
something, the site owner is not liable provided they comply quickly with
takedown requests. It's why YouTube can allow users to upload videos, and a
similar principle is the reason 4chan is still in existence despite the
hundreds of thousands of child porn pics that have been uploaded to it.

------
b1daly
I'm shocked that Grooveshark has made it this long. Especially when you
compare it to the legal cases successfully prosecuted against individuals for
file sharing which were clearly not commercial. A part of this that I don't
hear people discussing is that for a legal right to remain relevant it needs
to be enforced. If legal and cultural precedent move towards a weakening of
copyright in general, then certainly the music business (and all digital
content business) will be drastically affected, even if in a specific instance
(Grooveshark) they are not losing revenues. Another thing that I think many
people aren't aware of is how expensive it is to produce and market music.
It's insanely expensive. The vast majority of artists with actual record deals
don't come close to recouping the expense. The labels have always made money
on hits, which have to cover the costs of producing and marketing them, plus
all the costs of the non-hits. I'm curious, do folks on this forum who are
anti copyright enforcement for music feel the same way about software?

------
ryanb
From what I've heard, Grooveshark has been pre-emptively making payments to
the labels monthly for over the past year so that they don't sue. They labels
seemed to be okay with this as they sort of figured out what Grooveshark was -
I wonder what happened to cause the change of heart by Universal.

~~~
MatthewPhillips
What changed is their lawyers gathered enough evidence to bring them to trial.
Grooveshark pre-emptively paying labels is not a replacement for a licensing
deal. Grooveshark is a company formed to exploit a legal technicality, nothing
more. Their service is indeed good for the end user who doesn't have to pay to
listen to any song that they want, but it is obviously bad for music labels
and artists.

~~~
code_duck
'obviously' is a very strong term.

My own experience anecdotally disproves your last statement entirely, but the
case against freely available music 'obviously' being bad for music labels and
artists doesn't' end there.

[http://www.guardian.co.uk/music/2009/apr/21/study-finds-
pira...](http://www.guardian.co.uk/music/2009/apr/21/study-finds-pirates-buy-
more-music)
[http://www.pcworld.com/article/236214/study_casts_pirate_sit...](http://www.pcworld.com/article/236214/study_casts_pirate_site_users_in_good_light.html)
[http://torrentfreak.com/pirates-are-the-music-industrys-
most...](http://torrentfreak.com/pirates-are-the-music-industrys-most-
valuable-customers-100122/)

Indeed, your position has a fantastic history of ridiculousness:
[http://www.diabolicalplan.com/uploaded_images/Home_taping_is...](http://www.diabolicalplan.com/uploaded_images/Home_taping_is_killing_music-714739.png)

And let's bring the crusade against the VCR while we're at it:
<http://eightiesclub.tripod.com/id408.htm> and then, move on to how rented
videos became a source of greater profit for studios than theaters.

I, personally, buy music that is available on Grooveshark. I can think of
several Bands I discovered on Limewire way back ended up benefiting from my
becoming a long-term fan, attending several concerts, and purchasing many
albums... which never would have happened if all I had was 30 second samples
on Amazon, for example.

Next, Grooveshark is absolutely not a 'company formed to exploit a legal
technicality, nothing more' - they are a pioneering company bucking the
ridiculous status quo.

To top it all off, I'm a working musician. Have a nice day.

~~~
adgar
My experience, anecdotally, is that I haven't met a single person who bought a
song that was available on grooveshark. We even share accounts so that we can
create playlists for shared tastes, to save each other the trouble of looking
up songs that we don't want to pay for.

Have you considered that being a working musician may be why you are willing
to pay for music that is otherwise free?

~~~
code_duck
There you go, you've met me! I've bought a song that was available on
Grooveshark. Not sure why this would be unusual, but my reasons would be

a: you can't count on a given album remaining on grooveshark forever b:
streaming is not as convenient as having a real file c: I genuinely appreciate
music and want to support my favored semi-obscure musicians d: albums on GS
may be incomplete or lower quality e: I don't have an issue coming up with $10
here and there

This may be related to my personality and experiences but I don't think it's
related to my income sources (which are not solely music of course).

I mainly use GS to discover new music, and listen to mixes and live shows
which are not for sale.

~~~
adgar
> I mainly use GS to discover new music, and listen to mixes and live shows
> which are not for sale.

Do you think this is a mainstream position to hold? See, I'm not an
audiophile, I don't often go to concerts, and neither are anybody I know in
real life. We just listen to music because it's nice. Do you think people like
me actually are buying music in droves, and I'm just an outlier? Because from
my perspective, people who like "semi-obscure" bands and people who want to
pay for stuff not on groove shark are by far the minority.

~~~
code_duck
I'm not an audiophile, I don't often go to concerts, and neither are anybody I
know in real life either. I don't even spend that much on music, probably only
10-15 albums a month.

A _lot_ of people use Youtube as their radio, and basically I see Grooveshark
as doing the same thing. Why be forced to stream a video when you just want to
hear the audio?

~~~
adgar
Wait, 10-15 albums a _month_? You buy well over 100 albums a year?

.... that's a lot of music to buy, dude. Did you mean "10-15 dollars"?

~~~
Anderkent
Probably was supposed to be $10-15 _on_ albums, since it's preceded by "I
don't spend that much".

------
qjz
I wonder if there will be many winners from these music wars? I've been
seeking out music released under Creative Commons licenses via Jamendo and the
Internet Archive for a while now, and the quality and selection continues to
improve (not just click hop, noise or tracker-based techno anymore). _Most_
artists don't benefit from their relationships with labels, so anything that
reduces their exposure can hurt their main sources of income (performances,
merchandise, etc.). It will be interesting to see if new artists start
ignoring labels because they simply aren't worth the trouble.

------
mrleinad
If they go down, I´d love to see them open source all the tech behind their
site... maybe as a way to say Universal "now there are 1000 more sites like
us, fuck you".

------
plink
"UMG is seeking maximum damages of up to $150,000 per infringement from
Grooveshark, which could mean more than a $15 billion payout if the lawsuit is
successful."

If the RIAA/MPAA should rule our world, then $15 billion should be the price
of a sandwich.

------
tucson
Grooveshark is highly successful on facebook (much more than spotify and
pandora), and its been gaining even more fans lately.

<http://99like.com/music.php>

------
adrianwaj
slightly offtopic: would it work to tag music on Youtube via Musicbrainz(eg
<http://musicbrainz.org/doc/Jaikoz>) and replace GS tracks with YT streams?
Would it offset legal issues onto YT?

Probably better to do for a new startup.

~~~
baddox
I can't remember what is is, but I'm pretty sure there's some program that
uses an interface similar to Napster/Limewire, but in the background it
searches YouTube for a song, downloads the video, and extracts the mp3.

A service like this is bound to yield inconsistent quality, and YouTube will
constantly be removing videos, but I suppose it could be made to work.

~~~
adrianwaj
Yes, there's been tons of YT interfaces over the years, but for some reason I
always go back to youtube.com. I didn't know about downloading the mp3. I
think that'd be against YT's terms, although I would like to be able to access
a vid's soundtrack and not be forced to dl the video.

The innovation is really about labeling YT vids with the correct metadata
automatically, rather than manually. In fact, YT should be connecting its
music and artists to Musicbrainz already upon upload. It's about connecting
artists and songs on yt to their corresponding pages on MB,

In effect, there could be a browser plugin that placed a play button next to
each song here that gets the right song every time:
[http://musicbrainz.org/release/8d0bc6d4-8700-44e8-90c8-b86c2...](http://musicbrainz.org/release/8d0bc6d4-8700-44e8-90c8-b86c23e7ff14)
\- you could also bookmark songs for your collection.

YT must be already catalogging its music to some extent to produce artist
pages like this: <http://www.youtube.com/artist/Pearl_Jam>

So you could take your local mp3 collection, tag it, save as a playlist,
delete all the files and then access all the music on site from YT via the
playlist.

I think the best way to operate such a system without YT involvement would be
to have a browser plugin that fingerprints and tags YT music vids as they're
played in the browser, there'd have to be some interaction, but as a
distributed effort, you'd gradually build up a yt-mb database.

------
ggwicz
And juuusst as the anti-SOPA movements were giving me hope.

Way to go, Universal.

------
frankydp
When you cant pivot, litigate.

------
101001010111
Here are the questions I have every time I see these music lawsuits:

How many of the people using this Grooveshark service are
present/former/would-be Universal customers?

How do you prove this? Should you attempt to prove it before deciding to sue?

What if the people using Grooveshark are just too cheap or too poor to ever
buy Universal releases? Is that possible?

On the flipside, what if they are also Universal's best customers? Is that
possible?

The article says they named specific uploaders in the complaint. Maybe they
have been able make some assumptions about them as existing/potential
customers? (e.g. They have some assets and/or they've bought Universal
releases in the past.)

------
funkah
I've been wondering how Grooveshark's existence was even possible. I assumed
they just hadnt been messed with yet by content owners, and that was why it
was still around. Maybe that's about to change.

