Grooveshark -- DRM-free P2P music -- pays uploaders

By Cory Doctorow

September 7, 2007

Steve sez,

I work for Grooveshark, a music service based out of Gainesville, Florida. The upshot is that we are offering free, unlimited streaming as well as DRM-Free tracks for download (at around .99 cents per track). Since we're doing this all over a peer to peer network a la Limewire, we have also decided to share a percentage of each sale with the people actually sharing the music. Thus, if you upload a song and someone downloads it from you part of the money goes to the copyright holder, part does to us and the rest is credited to your account.
We are really working to build grass roots support for this idea. we have gotten the interest of a ton of independent labels as well as some larger ones (Magnatunes/Naxos/Sheridan Square), and even though we're not out of California we have still managed to raise awareness with Angel Investors. We've released our BETA and the press release for it is going out later today, we want as many people to see the product as we possible can and your help would go a long way.

Link [ http://www.grooveshark.com/ ] (Thanks, Steve [ http://www.howtosplitanatom.com/ ] !)

7:19 AM

By tazzy531

September 7, 2007

So basically they are piggybacking off of LimeWire and charging people that don't know that they can get it for free (illegally).

Problem I see with this is that the record agencies would want quality control on the tracks that they release.

7:48 AM

By Simon Greenwood

September 7, 2007

a) The phrase is 'a la Limewire', so they presumably have their own client/server system, not Limewire.
b) They are picking up labels in the same way as eMusic, not illegally distributing copyrighted work.

Well, that's what I read anyway.

9:15 AM:

By jbonnain

September 7, 2007

Simon is pretty much on the money in regards to the stated concerns.

We have filters in place which will restrict music files to a minimum of 128 kbps. This, of course, isn't the only option for our members. We'll scale from your everyday, typical mp3 file (128 kbps-320kbps and beyond) on up to OGG and FLAC files. Of course, there will be no "premium" for this higher quality of sound, as you've seen on other channels of distribution. These tracks will remain 99 cents. In that regard-- and as far as quality assurance goes-- there is nothing to worry about.

Secondly, we have all legal aspects covered. While I of course cannot delve too much into this, our system is perfectly legitimate and set to shake things up a bit.

I hope this clears everything up. If you have any other questions or concerns, I'll be happy to field them. Cheers!

9:30 AM

By Anonymous

September 7, 2007

So what happens if the encoding is of a bad quality (like re-encoding music with a lower bit rate)?

The problem with this, is that when people get payed to deliver goods, there will be frauds. Someone might upload a Madonna song, and claim that it is Mariliy Manson. Is there a built in system to protect those who buy fake songs?

A better solution would be someting like iTunes combined with p2p. You download parts of the song from the store, and the rest of it is downloaded from the users. The users get paid based on bits/second rate or something, and each part of the file is checked against a central hash database (like Bittorrent)

1:08 PM

By Anonymous

September 7, 2007

I'd like to know exactly why this is somehow going to attract people (and labels for that matter) if they're splitting the profit from purchased P2P downloads with the artist and the sharer.

Either the labels are taking a drastic, drastic cut in profit, or the cost of the tracks is going to be significantly higher than on other services.

Why would a label agree to this?

What am I not getting here?

3:37 PM

By Nathan

September 7, 2007

In response to Anon:

"So what happens if the encoding is of a bad quality (like re-encoding music with a lower bit rate)?"

Encoding won't be an issue, as bitrates are clearly displayed.

"The problem with this, is that when people get payed to deliver goods, there will be frauds. Someone might upload a Madonna song, and claim that it is Mariliy Manson. Is there a built in system to protect those who buy fake songs?"

You can stream all songs in their entirety on Grooveshark free of charge. If you like what you hear, you can buy the song. This way you'll never accidentally download the wrong song. In fact you can even tell which version of a song you want.

I'm a little disheartened that you are so quick to judge without taking a closer look. As great as iTunes has been, it has not solved the music industry's problems. Keep in mind that Grooveshark is an honest attempt by a group of college students to change the music industry for the better. We all enjoy music, and we'd like to see a system that benefits the industry as whole (Yes that includes the artists, labels and consumers).

We are, and will remain, our own biggest critics.

Feel free to email me with any questions you may have.

-Nathan Thompson
(nathan.thompson@grooveshark.com)

4:01 PM

By Nathan

September 7, 2007

In response to (#17) Anon:

The labels love the idea for this very, very simple reason: the great majority of the files that show up in Grooveshark were previously being shared illegally. Once they enter Grooveshark, all downloads of those exact same files from within the system will generate revenue where previously no revenue existed.

This definitely shouldn't be viewed in terms of ANY sort of a "cut in profit", because the original revenue that the labels were receiving was exactly zero.

As for splitting the profit with the user, here's how that part works: the labels usually have a set rate that they use with most digital music services, such as iTunes, Rhapsody, or even Grooveshark. That part is what they want, and that's what they get. From there, *we* split our profit, 50/50, with the users. The only people who are paying out of their pockets to the users are us.

-Nathan Thompson
(nathan.thompson@grooveshark.com)

4:13 PM

By Vrogy

September 8, 2007

@All

As far as legal issues are concerned, we actually are keeping an escrow account for the major record labels and any other labels we do not currently have on board. This is exactly like the movie industry and we are told by our lawyers that this is the way to go.

6:22 PM