[bri3d]

There's a timing game being played here that YouTube already won, and which I think GrooveShark are about to lose.

Both YouTube and GrooveShark bet that they'd be able to (quasi-illegally) host major production content without the owners' consent until some derivative (in YouTube's case, raw audience combined with ad revenue and in GrooveShark's case apparently metrics) gave them enough value and/or capital to strike deals with legitimate content owners.

YouTube won; they were able to push enough traffic to entice labels into partnering with them for a revenue-generating service (VEVO), and were subsequently able to begin enforcing the DMCA aggressively via automated tooling combined with an easy takedown process for labels.

I think GrooveShark are about to lose. So far, labels seem less interested in making deals with them than in destroying them, and I highly doubt they have enough legitimate content to survive. They didn't make it past the "host infringing content for long enough to generate value" inflection point quickly enough.

It's also worth noting that it's possible to host a much wider variety of independent / user-generated content which is actually interesting on a "video site" than a "music site." "Video" encompasses an incredible range of content (including music!), while "music" is a single content type with a much narrower range of producers. Many more people have cute kids, athletic talent, cool cars, funny pets, and so on than have musical talent.