Battered by lawsuits and the forced delisting of its apps, Grooveshark readies a new model for its streaming music service.
Escape Media's Grooveshark is preparing to launch new apps on iOS and Android which will enable users to create and share streaming radio stations. The digital radio service, Broadcasts, which costs $1 monthly, also features a texting ability, which allows users and disc jockeys to chat with one another via the apps.
The streaming music company is hoping to avoid litigation by paying royalties to music companies at the rates set by federal regulators.
Grooveshark is doing all that it can to prove to everyone one that the company is truly seeking to be a "legitimate player," according to Grooveshark CEO Sam Tarantino. He says the peeved record labels told him to put something together and then get back to them.
The model is similar to that employed by Pandora, which will help Grooveshark skirt direct negotiations with the record labels it has angered with its past systems. Unlike Pandora, Grooveshark's new spinoff service will be free of commercials.
Spotify and other on-demand music services work on deals with each music label, giving subscribers of the streaming music services the ability to store songs for offline play and to stream entire albums whenever they want.
Spotify's monthly fee for premium services is 10 times more expensive than Grooveshark, but Tarantino says he hopes his company's new product is cheap enough to lure people in and priced high enough to deliver significant revenue.
Back in September, Judge Thomas Griesa of the U.S. District Court in Manhattan ruled against Escape Media Group and in favor of plaintiffs Arista Music, Arista Records, Atlantic Recording, Elektra Entertainment Group, LaFace Records, Sony Music Entertainment, UMG Recording, Warner Brothers Records and Zomba Recording
In addition to infringing on the rights of the plaintiffs, Escape Media manifested intent to foster the infringement of copyright, according to Griesa's ruling in federal court. The judge's ruling was partially based on a memo circulated inside Escape Media back in 2007, in which the company encouraged its employees to upload 5,977 tracks without the consent of the copyright holders.
"By overtly instructing its employees to upload as many files as possible to Grooveshark as a condition of their employment, Escape engaged in purposeful conduct with a manifest intent to foster copyright infringement via the Grooveshark service," stated Griesa in his ruling.
After the ruling was established, Escape Media's counsel said the company intended to appeal Griesa's decision.
