Lokalaskurar said:
lawfer said:
They pay the artists EVERY TIME a song is played (hell, if you play a whole album, they technically buy the album for you). They maintain their site off of ads, and VIP subscriptions.
Not trying to argue with anybody here, but how can Grooveshark make any money if this is the case? Because buying the app is not likely to cost you several hundreds of dollars, but there are (a lot of) people who listens to music worth over that amount of money. With no ads, no VIP subscriptions, Grooveshark would go bankrupt eventually.
From a financial point of view this sounds either like bogus or illegal. And as Google removed Grooveshark, my money's on the latter.
Like I said, they live off ads and VIP subscription. Now, let me ask you, how much do you think they pay artists for these songs? If a song costs from .99 to 1.99, the value of an unowned song is, let's say, .20. Grooveshark uses the high traffic it receives as a way to obtain higher income from ads, this income is then used to pay the royalties to the artists whose songs have been (repeatedly) played from the page where users see the very ads.
So technically, the only reason as to why they are still alive, and not bankrupt, is because they don't pay for the royalties themselves, they use the very ads as support. VIP subscriptions would be their actual source of income, which, by the way, a lot of people own the VIP subscription.
Not to mention, Grooveshark allows you to upload your music, and sell it. A percentage goes to them of course, which I assume its also for costs. Alternatively, every song you upload can get that artist paid; the same applies to each and every person. In other words, If I upload X song from my collection, and you just so happen to also have song X, and person Y listens to my song X, and then your song X, the artist gets paid for BOTH songs. And you know what? Person Y doesn't even own either song X. The more she listens to it, the more the artist gets paid, and she's much more likely to either buy the album from Grooveshark itself, or go to the nearest Best Buy and get it. Win-win.
The ONLY reason major labels dislike Grooveshark is because they don't get the profits directly. You see, when you as an artist are directly paid for music (for example, after a concert), record labels do not get profit. Record labels only profit from, you know, selling records (marketing its all about getting to that). Grooveshark business practice is indeed risky, because it is new and unorthodox, hence most people's skepticism... But it is as legitimate as it gets.
Now, Grooveshark can't keep up with EVERY artist/song uploaded to the site. That's why they have this on their site:
"We strongly suggest that you contact us at licensing (at) grooveshark (dot) com before filing a DMCA infringement claim. Grooveshark has an artists/label program to ensure that any owner of content will be compensated fairly for each time their content is played via Grooveshark. To be clear, as long as your infringement claim complies with the terms of the DMCA we will honor it, however <b>we would much rather pay you</b> than remove your content."
Grooveshark is the perfect example of how the media industry is nothing but greedy. They complain when people pirate, and now also complain when we find a clever way pay them? (Although they are not getting paid, the ARTISTS are, which, to me, it should always be that way.)
