[legutierr]

Two thoughts on this.

First:

I was an occasional user of Grooveshark, and whenever I used the service (which had a brilliant UI, by the way) I found myself wondering how they could still be operating, given that they weren't licensed by the major labels. It felt like Napster in a web app, only more centralized (and thus, easier to take down, one would think).

Well, the answer seems to be that they have been fighting the major labels in the court this whole time (~5 years). Unlike maybe everyone else who has faced up against the major labels, Grooveshark forced them to fight. When the labels didn't give them a licensing deal, and told them to stop operating, Grooveshark responded, "Make us."

They created their tech, built a loyal following, grew their business, all the while fighting this lawsuit. In the end, the only thing that stopped them from pursuing their vision was a judges' order. This settlement seems to be a judge-mediated settlement of only the damages portion of the trial after liability had been established. It seems that the judge ruled against Grooveshark by summary judgement in September, which means they have known for more than 7 months that this was inevitable. They shut down their service 2 days ago.

People have called Grooveshark "shady", and many people believe that their business model was "illegal". Both adjectives may be accurate descriptions. I think the best adjective to describe these guys, however, is "gutsy".

Second:

The front-end system that Grooveshark built, which is the best that I have used for music playback and discovery, is now jointly owned by the major labels. They cannot possibly be short-sighted enough just to throw that away. Will we see Grooveshark resurrected as a label-owed alternative to Spotify, et al? Will they try to maintain any portion of the Grooveshark organization, especially the engineering team? Again, they would be foolish not to try, although maybe I'm giving them too much credit.

[Lazare]

> The front-end system that Grooveshark built [...] is now jointly owned by the major labels. They cannot possibly be short-sighted enough just to throw that away.

Uhhh. I'm honestly confused. Is this sarcasm? Because if there's one thing that major labels have demonstrated, it's a willingness to be short-sighted.

[oldmanjay]

I hope that you're logically consistent and also consider other people who make their money by trampling on rights to be gutsy. for instance, gangsters, fraudsters, spammers... all have a similar business model in that they make money by ignoring the legal framework of their chosen business. certainly does take guts!

[mdorazio]

To be fair, the same can be said of Uber and Airbnb, both of which are largely praised on HN in the same way.

[whichfawkes]

How are those services trampling on anyone's rights?

Despite loving Grooveshark, I tend to agree that copyright has some meaning and purpose. I don't think taxi companies have a right to business just because they were there first.

[tptacek]

The subtext is that they're pushing on and in many cases breaking regulations (on carriage service and short-term tenancy), and also externalizing their costs. I happen to believe that's actually true in both cases, but that doesn't make what they're doing equivalent to building a business on someone else's proprietary IP.

[chimeracoder]

> I happen to believe that's actually true in both cases, but that doesn't make what they're doing equivalent to building a business on someone else's proprietary IP.

Drop the "intellectual" part of "intellectual property" and that's exactly what AirBNB is doing - tenants are literally using property that isn't theirs (they've leased it, but they don't own it)[0] and are making money off it.

And in doing so, they are also impacting others' property rights, since the externalities of short-term tenancy are borne by neighbors, not by the person who lists a whole-apartment rental on AirBNB.

[0] And given how hard the music industry has been pushing the line "you don't own the music you buy; you're only leasing rights to access it" for digital downloads (not just streaming), this isn't really that different a situation.

[tptacek]

I agree, but that part of Airbnb's usage pattern is bound to change, and the service will easily survive that change. Grooveshark, on the other hand, can't survive a correction from proscribed uses.

[whichfawkes]

I'd argue that they make it easier for individuals to exercise rights they should have. They're merely centralized listings that make it easy to connect buyers and sellers of services in transport/lodging markets.

Fundamentally, if I own a property I should be able to allow/disallow access to anyone as I see fit, and charge appropriately. If I make money, I'm still obligated to pay taxes on it (therein, I imagine, lie the problems).

So I'd claim that AirBnB and Uber are helping push for more sane regulations which allow free-er markets, while Grooveshark was basically just short of directly-stealing the content of others to profit on themselves.

That said, I'd still rather have Grooveshark than not, because I personally don't care so much about the record-companies rights - but certainly the government should be there to help uphold the rights of individuals and businesses, which, alas, means legal trouble for Grooveshark.

[tptacek]

If you buy a property in the middle of residential Oak Park, on a sleepy block lined with bungalow houses, do you have the right to open up a bar in it? How about a 24/7 metal machining shop? A noxious waste processing plant?

Where do we draw the line, and why do we draw it there?

It's not an abstract question: the regs that Airbnb pushes on are society's current answer to that question. They're going to change, as I think we can all see, but how far will they change? That's an extremely important and immediately impactful question right now.

Meanwhile, bringing this back around to Grooveshark: copyright is unlikely to change in ways that would be meaningful to Grooveshark.

[tptacek]

I disagree strongly that Uber or Airbnb and Grooveshark are comparable.

[TeMPOraL]

Yeah, I tend to find AirBnB and especially Uber worse. Also, Uber seems to be run by sociopaths.

[tptacek]

I'm pretty ambivalent about the picture I've gotten of Uber's management but would generally advise against labeling people we don't really know as "sociopaths".

Though, hustling senior citizens with bizarre Wii tennis mastery does make one think.

[dreamfactory2]

I guess gangsters are a species of hacker in a sense

[TeMPOraL]

I think a lot depends on whether you gain or suffer from their services, and also on the coolness factor. Your garden variety extortionist, mugger or trigger man is boring, but articles about drug trafficking using UAVs or microsubmarines tend to gain traction among tech crowd. Uber and AirBnB have just a huge coolness factor - because they have a mobile app! - but generally, it's a typical pattern of "let's make money giving a group of people some value, dumping externalities on someone else, social order be damned".

[whichfawkes]

Without commenting on whether I think "gutsy" is good or accurate in this instance, it's worth saying that copyright is a civil issue, not a criminal issue. AFAIK, the people at Grooveshark haven't been threatening to break anyone's kneecaps...

[tptacek]

That's not true at all. Copyright infringement is a criminal issue exactly in cases where it's done with commercial intent, and not just in the USA. It predates both music file sharing and the commercial, public Internet.

[cryptophreak]

This is like saying that McDonald’s and American Apparel share a similar business model in that they make money by ignoring the more obscure commandments in classical Hebrew scripture.

The claim only sounds meaningful to people who subscribe to the particular framework in question. To everyone else it’s trivial.

[bsbechtel]

How good was their business model? They survived for 10 years, including financing what I'm sure were expensive legal battles, but how much of that was from revenue and how much from equity/debt financing?

[efuquen]

Grooveshark had a paltry amount of equity/debt financing compared to what's common in the valley. In total they raised a couple million, in the low to mid single digits. Part was equity and part debt financing, which was all paid back and some of the equity was also bought back from investors who wanted out after the lawsuits.

Grooveshark was completely self sufficient for a long time, even with the lawyer bills. What really killed it was the pressure from labels to get them kicked off ad networks, mobile app stores (first Apple, then Google), and prevent the more lucrative direct ad deals you need to really survive. Once the summary judgement occurred is when it really started becoming impossible.

Disclaimer I was an early employee that worked there for 5 years.

[Confusion]

Spotify is effectively label-owned.