Gooveshark faces more woes

May 2012

Internet, record labels

There is more trouble ahead for Grooveshark the popular streaming service that in one way or another has run afoul of every major record label. EMI Music, the only major record label to license its music to Grooveshark, has now sued the company in New York State Supreme Court, saying that the service owes $300,000 plus interest for non-payment on a promissory note having paid $150,000 from the alleged $450,000 due. As a result, EMI says, it has terminated its licensing agreement with Grooveshark.

In a statement, Grooveshark said: “Grooveshark was recently forced to make the difficult decision to part ways with EMI due to EMI’s currently unsustainable streaming rates and EMI’s pending merger with Universal Music Group, which we consider monopolistic and in violation of antitrust laws. To date, Grooveshark has paid over $2.6 million to EMI, but we have yet to find sustainable streaming rates.” Grooveshark has an estimated  35 million users, and argues that its service is legal under the terms of the Digital Copyright Millennium Act, which i simple terms gives ”safe harbor” to sites that host third-party material if they comply with takedown notices from copyright holders.

Grooveshark is facing a separate federal action by Universal Music Group, Sony Music Entertainment and the Warner Music Group. In January 2012 EMI’s music publishing division brought an action against Groovesharks’s parent company, Escape Media Group, for non payment of royalties due. and and

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