Grooveshark
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Grooveshark was a music streaming service founded in 2006 that let users play any song on demand for free. At its peak it had tens of millions of users and 145 employees. The service relied on user uploads without licenses from rights holders, drawing years of copyright lawsuits from the major record labels. On April 30, 2015 it shut down overnight as part of a settlement with Universal, Sony and Warner.
02 / Grooveshark FAILURE REASONS
Failure reasons
Grooveshark failed because it never secured licenses for the music it streamed. Users uploaded copyrighted songs without permission, and evidence showed its own employees had uploaded thousands of tracks, destroying its neutral-platform defense. Universal, Sony and Warner sued, and a judge ruled the infringement willful and in bad faith, exposing the company to up to $736 million in damages. On April 30, 2015 Grooveshark settled: it shut down immediately, wiped its servers, and handed its website, apps and patents to the labels.
03 / EVENT HISTORY
Events in the structured record
- Company founded
Grooveshark was founded as a free on-demand music streaming service.
- Lawsuit filed
Nine record labels sued parent company Escape Media for willful copyright infringement in the Southern District of New York.
- Closure announced
On April 30, 2015 Grooveshark shut down immediately as part of a settlement with Universal, Sony and Warner, handing over its website, apps and intellectual property.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
A consumer product built on unlicensed content is a lawsuit waiting for a damages number.
- 02
When your own employees upload the infringing material, the safe-harbor defense is gone.
- 03
Settling by handing the company to your plaintiffs is the most expensive license ever.