Things are not looking good for music streaming service Grooveshark. After getting hit with lawsuits from Universal Music, Warner Music Group, and Sony Music Entertainment, EMI — the only company with whom Grooveshark actually had a licensing deal — has now filed suit against Escape Media Group, Grooveshark’s parent company, claiming that Escape has failed to make a single royalty payment.
While the lawsuit, filed in the New York State Supreme Court, does not specify the amount in damages EMI is seeking from Grooveshark, reports The New York Times, correspondence between the two companies show that EMI has requested Grooveshark pay it $150,000 in royalties. Grooveshark said in a statement that the matter is simply a “contact dispute,” which the company expects to “resolve.”
Grooveshark currently boasts 35 million members, who are able to upload their own tracks to Grooveshark’s music library. Because of this legally dubious practice, Grooveshark is often hit with take-down orders specified under the Digital Millennium Copyright Act (DCMA), which requires Internet companies to remove infringing content within a specified amount of time, but protects these companies from being sued if they comply with the order.
Unfortunately for Grooveshark, someone claiming to be an employee of the company posted a detailed comment on industry publication Digital Music News, claiming that Grooveshark employees regularly uploaded music to the service — a move not protected by the DCMA. This led to an investigation by Universal, which concluded that Grooveshark employees — including its CEO and several vice presidents — had together uploaded more than 113,000 songs.
Grooveshark claims that the allegations of employee wrongdoing are “blatantly false.”
With EMI now bearing down on Grooveshark with a gavel of its own, the company is now being sued by all four of the major record labels.
Unlike most of the other streaming services, Grooveshark is more or less cost-free, and makes money from advertisers, including big names like Mercedes-Benz. But unless Grooveshark can swim its way out of these legal troubles, it would appear that the whole endeavor is far from cost-free, at least for Escape Media and its employees.
If you’re a user of Grooveshark, now might be a good time to start migrating to another service. Spotify, anyone?