[hapless]

They weren't licensing anything. They were relying on DMCA safe harbor provisions to protect them from infringement suits. The problem is that the executive e-mail indicates plain as day that they were ineligible for that safe harbor in at least two ways: they knew of and were profiting from infringement.

Who could have guessed that basing a business on copyright infringement might get you sued for copyright infringement?

[tantalor]

The email says "we use the label’s songs", "the data we got from them", "we pay them".

This suggests they were getting the label's data from the label and paying the label.

That seems like a license to me.

[hapless]

The e-mail implies that their plan was to knowingly infringe for months/years before negotiating a license.

They could then use the data gained from (infringing) streaming/uploads as a bargaining chip while negotiating the license.

[tantalor]

I think the email is ambiguously worded.

I read it as, "we license their songs, and then we license the usage data back to them at a higher rate once it reaches some threshold."

You apparently read it as, "we infringe until we have enough usage data, and then we negotiate a contract where they pay us."

The few ambiguous parts are,

1. Whether "we use the label’s songs" means to license or to infringe.

2. Whether "the data we got from them" is licensed or infringement.

3. Whether "what we pay them" means what they had paid in license fees up to that point, or the terms of the negotiated license.

[pyre]

You're missing:

  > we are achieving all this growth without paying
  > a dime to any of the labels

and

  > In our case, we use the label’s songs till
  > we get a 100 (million) uniques

Combined these statements make it less ambiguous.

[tantalor]

I read "not paying a dime" as referring to their net with the labels

In their business plan, they take a loss for licensing up front, but eventually net positive by licensing the data back to the labels.

Contrast with, e.g., Spotify, who nets a loss with the labels.

[andylei]

if that were the case, why would they then say:

"Let’s keep this quite for as long as we can."

also,

> they take a loss for licensing up front

doesn't seem like the correct interpretation, because they say

"we are achieving all this growth without paying a dime to any of the labels"

[adgar]

Grooveshark didn't start licensing anything from major labels until extremely recently. They built their userbase on unlicensed music.

[tedunangst]

Everything in the second paragraph is happening in the future. This isn't immediately clear, but it's a common enough writing style. Just pretend they wrote "we will use", "we will pay them", and "they will pay us".