creative deconstruction

EMI Drops Lawsuit, Licenses Entire Catalogue to Grooveshark

Posted on 13. Oct, 2009 by refe in NEWS, TECHNOLOGY

Grooveshark inks licensing deal with EMI

You might remember a while back that EMI filed a copyright infringement lawsuit against music streaming service Grooveshark. Well, in an interesting twist on that story it looks like EMI has not only dropped the lawsuit, it has now licensed it’s entire catalogue to Grooveshark in the US.

This is the first major label to jump on board with the service, which is a direct competitor to the European-based Spotify (which has been talked about quite a bit around here lately.) The two company’s are in a race to secure licensing for both major and independent record labels in the United States.

Like Spotify, Grooveshark is an ad-supported music streaming service. Basic accounts are free, and users can opt to pay $3/month to upgrade to an ad-free premium account.

I would have loved to sit in on the EMI/Grooveshark meetings. It isn’t everyday that you get to read about such a dramatic shift in the approach of a company with the size and influence of EMI.

Grooveshark ran into copyright infringement issues with the record label due to the six million or so tracks that have been uploaded by their users. Many of those tracks were unlicensed. Until now, Grooveshark’s policy has been to react to unlicensed tracks as they are notified of them by the copyright holder.

Apparently EMI has realized the potential of on-demand music streaming services like Grooveshark and Spotify, and have decided to capitalize on the opportunities they present rather than attempt to legislate them out of existence.

“We think services like Grooveshark offer great music discovery options for fans,” said Mark Piibe of EMI Music. “In turn, Grooveshark offers a new revenue stream for our artists and will help us learn more about how we can better connect different types of fans with artists.”

These new revenue streams are becoming increasingly important as album sales continue to decline and single track downloads struggle to make up lost profits. Streaming royalties aren’t likely to come close to matching the kind of revenue the labels have enjoyed with the CD. However, there is no denying that at least for now these services represent the way that many listeners want to get their music. For that reason I think EMI has made a prudent decision here.

Things are heating up in the on-demand music streaming market. Grooveshark still has three major labels and a host of independents and aggregators to ink deals with before it can call it’s catalogue comprehensive. Spotify has more money and more buzz on its side, but is now under quite a bit of pressure to catch up in the licensing department. This will be an interesting one to watch.

Thanks to Dion Roy for the tip-off.

Tags: copyright, emi, Grooveshark, online streaming, Spotify