Grooveshark suffered a musical loss yesterday, after major record label EMI cut ties with the music streaming service.
The licensing deal was terminated after the music site failed to pay the licensing fees as drawn up in the contract agreed back in 2009, in a lawsuit filed against Grooveshark back in January. As the only company to have had an official contract with Grooveshark, this is sure to be a huge blow for the site.
"Grooveshark was recently forced to make the difficult decision to part ways with EMI due to EMI's currently unsustainable streaming rates and EMI's pending merger with Universal Music Group, which we consider monopolistic and in violation of antitrust laws," Grooveshark said in a statement. "To date, Grooveshark has paid over $2.6 million to EMI, but we have yet to find sustainable streaming rates. In spite of this, Grooveshark's dedication to artists and rights holders remains the same."
Grooveshark's operations differ to other music streaming agencies, in that it doesn't enjoy a broad range of licensing agreement and instead relies on its users to upload songs to be shared by the rest of its clientbase. But now the site has lost its contract with EMI, any music licensed by the label will need to be removed immediately.
With Grooveshark falling out of favour with EMI, the future doesn't bode well for the site. As well as losing one of the biggest labels in the industry, Grooveshark also has to contend with three other music heavyweights - after being sued for copyright infringement by Sony Music, Universal Music Group and the Warner Music Group.
Let's hope Grooveshark can keep its head above water, and not be swallowed up by the 'Jaws' of its legal issues.
Source: CNET (opens in new tab)