Original URL: http://www.theregister.co.uk/2011/11/29/grooveshark_copyright_fail/

Grooveshark bunged staff bonuses 'for pirating music'

Universal Music accuses streaming site in court docs

By Andrew Orlowski

Posted in Media, 29th November 2011 15:46 GMT

Music streaming site Grooveshark paid employees by the amount of music they illegally uploaded to the site, filings in a lawsuit allege. Universal Music says Grooveshark's own staff submitted at least 100,000 sound recordings "to boost [owner] Escape's library of infringing content and to make the service more attractive to prospective users".

Rival streaming sites, such as Spotify and Rdio, waited until they had licences before launching - but Grooveshark's strategy was shoot first and talk later. Grooveshark claims that the DMCA means it doesn't need licences - but evidence submitted in an ongoing infringement lawsuit filed by Universal Music suggests it knew exactly what it was doing.

Now we know, too, as the testimony is now public. In one eyebrow-raising email, Grooveshark investor Sina Simantob, who is CEO of Highland Wealth Services and executive chairman of Escape Media which operates Grooveshark, wrote: "We bet the company on the fact that it is easier to ask for forgiveness than it is to ask for permission."

Simantob added: "I think these guys [Universal Music] have a real chance to settle with MG within a year and by that time they'll be up to 35m uniques and a force to be dealt with."

It's hard to imagine a more effective way of sending a record label lawyer ballistic with rage. Except than with this next bit testimony, perhaps. One employee explained that staff were given a weekly quota of unlicensed music to upload and "a small extra bonus if we manage to go above that".

"Are the above legal or ethical? Of course not ... If the labels or their lawyers can't figure out how to stop it, then I don't feel bad for having a job. It's tough times."

King Crimson guitarist Robert Fripp wrote to Grooveshark asking them to remove his music - only to see it reappear again overnight.

Simantob even explained Grooveshark's strategy of avoiding the legal negotiations services such as Spotify undertook:

We use a label's songs until till we get 100m uniques [sic], by which time we can tell the labels who is listening to their music, and then turn around and charge them for the very data we got from them, ensuring that what we may them in total for streaming is less than what they pay us for data-mining.

"Let's keep this quite [sic] for as long as we can," he added.

On its site Grooveshark claims to have licences with 1,000 labels: "We work tirelessly to secure the rights to every sound recording ever created in hopes of guaranteeing that our users can access the songs they love and discover new music previously unavailable on other services."

It brings a tear to your eye, doesn't it? ®