Grooveshark Email Reveals Execs Proud Of Growth “Without Paying A Dime To Any Of The Labels”

image from documents released in the lawsuit filed by Universal Music Group against Grooveshark include emails that appear to show that company executives set out to build as big an audience as possible while not paying for music. Their strategy appears intended to establish a stronger negotiating position with record labels while avoiding millions in payments to artists, labels and publishers. From an email dated 12/1/2009, Chairmen Sina Simantob wrote to another Grooveshark executive:

"…we are achieving all this growth without paying a dime to any of the labels… My favorite story related to our case is the story of a kid who appears in front of the judge for sentencing for the crime of having murdered both his parents saying judge have mercy on me cuz I am an orphan."

"In our case, we use the label's songs till we get a 100 (million) uniques, by which time we can tell the labels who is listening to their music, where, and then turn around and charge them for the very data we got from them, ensuring that what we pay them in total for streaming is less than what they pay us for data mining. Let's keep this quite for as long as we can."

Presumably Simantob meant "keep this quiet".

Court documents via CNET.

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  1. It has been fairly obvious for some time that this was the MO of Grooveshark but it’s good to get confirmation from the big cheese himself. YouTube played a very similar game and eventually struck a load of secret deals with rights-owners (secret even to their clients who have to be satisfied with their royalties without asking about the details).
    Too many of these innovative (ha!) content churners rely on a business model that stiffs the content providers. How hard is it to make money if you can force your suppliers down to zero?
    I have a solid plan for a game-changing real estate start-up that simply can’t fail. The only thing holding up a VC gold-rush is the pesky problem of backward-looking, traditional property ownership rights. But once I deal with that I’m up and running.

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