It appears that the only major record label to have a contract with Grooveshark has cut its ties to the popular music streaming site. Cnet points out that in a New York State court filing that EMI claims Grooveshark is not paying its share of a contract the companies entered into in 2009. The record label wants out of the contract after a $100,000 installment payment was not made by Grooveshark in March. EMI says managers at Grooveshark signed a promissory note late last year, guaranteeing the site would pay $450,000 to the label on a payment schedule. EMI now wants a summary judgement to nullify the contract.
Cnet quotes Grooveshark as responding:
"Grooveshark was recently forced to make the difficult decision to part ways with EMI due to EMI's currently unsustainable streaming rates and EMI's pending merger with Universal Music Group, which we consider monopolistic and in violation of antitrust laws," the company wrote. "To date, Grooveshark has paid over $2.6 million to EMI, but we have yet to find sustainable streaming rates. In spite of this, Grooveshark's dedication to artists and rights holders remains the same."
EMI previously sued Grooveshark in January, claiming the site failed to pay it at least $150,000 in royalties.
EMI was the only one of the four major record labels to license its music to Grooveshark. The other three major record labels, Sony Music Entertainment, Warner Music Group, and Universal Music, are suing Grooveshark for copyright infringement. Grooveshark employees have even been accused of putting up thousands of copyrighted works up on the site themselves.
So it seems Grooveshark got tired of EMI's shakedown and decided to forego their monthly protection payment. They will let the courts handle it, along with the other lawsuits. I'd be surprised if the website can hold out against the legal might of all of the major record labels for long. Goodbye, Grooveshark. It was nice, wonderful, even, while it lasted. Enjoy Grooveshark (despite their gaudy new ads) while you can at their website.