Grooveshark has been battling major record labels in recent years, losing a major ruling earlier this fall, over licensing issues related to its existing music service. Perhaps in an effort to mitigate damages in that case or to be prepared for a significant damages ruling, Grooveshark is launching a new online radio service that complies with record company licensing requirements. The new service, slated to launch in January, will run 99 cents per month and offer a no commercial experience.
According to Grooveshark’s CEO Sam Tarantino, the company is trying to demonstrate their willingness to comply with licensing requirements. Grooveshark’s existing service, a $9 per month unlimited offering, was built without obtaining several licenses first due a virtual catch-22 the record companies create for start-ups. According to Tarantino, these companies won’t extend licenses without first getting sizable financial guarantees which a company like Grooveshark is unable to generate without first getting the licenses. To get around this with their new offering, Grooveshark will use a system that enables the payment of government-mandated royalty rates, a system that is also used by Pandora and other platforms. This means Grooveshark will not need to secure individual license deals with record labels.
Grooveshark anticipates it will be able to get mobile apps used to access the new service in the Google Play Store and on Apple’s app store. Both Google and Apple had pulled Grooveshark’s previous app once the license problems surfaced in 2010. Grooveshark indicates the “broadcasts” will rely heavily on user created radio stations as opposed to algorithms. Users will also be able to text chat with other listeners using the app.
source: Wall Street Journal
Come comment on this article: Grooveshark launches new online radio app
