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Q&A With Grooveshark, Where ‘Everybody Gets Paid’ For Sharing Music

Q&A With Grooveshark, Where ‘Everybody Gets Paid’ For Sharing Music

The only online digital music store that actually rewards you for sharing your music with others answers all of the burning questions many of us have had.

I’ve been covering Grooveshark for quite some time now here at Zeropaid and many of you have written to me about how it sounds good on paper, but you just haven’t quite grasped how it works, how you get compensated for sharing music, and how on earth it’s legal. Well, now I’m able to answer all these questions and more thanks to a recent interview with Joshua Bonnain, head of Strategic Relations over at Grooveshark, who has made even this skeptical “reporter” a newly converted fan.

I must say that previously I’ve had my doubts about Grooveshark and admittedly never really shared more than a handful of songs at any one given time. It was never fully explained how one is actually paid when other users download a track from your shared music library, or whether or not the service could even be legal considering today’s anti-file-sharing climate in which the RIAA wields an iron fist upon any and all whom dare to to think outside the box when it comes to digital music distribution.

But, now I’m pleased to say that I think that Grooveshark, whose slogan is “Everybody Gets Paid,” may actually be every darn bit as cool and revolutionary and one would think and hope the concept actually is. How? Well, Josh made clear that “Grooveshark splits its profit with the users 50/50 after the royalties, fees, and other expenses for a given download have been paid out.” He also emphasizes that as far as legality, that all the”…proper arrangements have been made to ensure that we are a legal service.” This means you don’t have to worry about Grooveshark getting taken down and you losing all your hard earned credit like was the case for many of you with AllofMP3.com.

Another interesting point is that for all you audiophiles out there Grooveshark offers music in .OGG and.FLAC encoded formats, something you’ll never see on iTunes or any other digital music download store(except maybe OINK ). Chew on that for a second – a LEGAL digital music download store that offers .OGG and .FLAC? Try finding that kind of legal setup anywhere else.

Josh also makes a good point in that Grooveshark could also serve as a defacto music streaming service. For those of you like myself with several hundred GB’s of tunes that can’t very well be toted around entirely on a portable media player, Grooveshark will allow you to stream your music on the go. Unlike say Pandora or Last.fm, music for a party or social event could truly be on-demand. Plus, in the meantime you’re allowing your music collection to earn credit towards buying cool stuff or to purchase even more music. Think of it as interest-bearing account for your music collection.

Moreover, Grooveshark may just finally be the digital music revolution we’ve all been looking for after all.

THE GROOVESHARK INTERVIEW
ZP: All the tracks are of course DRM-free, but it also states that your system “maximize the bit-rate,” what is this maximized bitrate that tracks are encoded in?

JB: Grooveshark offers varying bitrates and file types in order to suit a wide range of individual tastes: everything from high-quality mp3’s upwards of 512 kb/s—in addition to your typical 128, 192, and 256 kb/s downloads—to open-format OGG and lossless FLAC files. This is extremely important for our audiophile membership, as there aren’t many other places where you can [legally] obtain lossless audio and high quality mp3’s.

ZP: Pricing —- are all tracks 99cents?

JB: Right now, all tracks are 99 cents. We plan on mixing this up a bit in the near future, though.

ZP: How precisely are users reimbursed for sharing their digital music collections with other users? How is it calculated and how and what can users redeem their credits for?

Grooveshark splits its profit with the users 50/50 after the royalties, fees, and other expenses for a given download have been paid out. If a user downloads a $.99 track, we may, for example, have to pay $.60 in licensing fees and $.03 in transaction fees, leaving $.36 to be split evenly between Grooveshark and the user who is “recompensated” for the download. Things such as purchase history, community contributions, and number of songs uploaded are all considered in determining which peer with a given file should be recompensated for a download. The amount given back to the user for any given download depends on the individual variables that go into it, such as cost of the song, transaction fees in place, and the individual arrangement we have with that particular record label.

Since the 50% split is simply purchasing credit at this time, members may only put the credit towards other songs. We’ll soon be adding merchandise and other options in near future (shirts, stickers, concert tickets, etc.), though it’s important to keep in mind that the decision is really up to the major labels as far as what types of merchandise are available outside of obligatory Grooveshark shwag.

How are you able to facilitate the distribution of music from record labels who have not formally agreed to allow their content to be shared or sold, especially DRM-free?

This is a big secret in regards to the model and our competitive advantage. The nature of the Grooveshark business model ensures that everyone is properly paid for their copyright claims. This includes anyone, whether major or indie label. We’re in talks with all of the major labels, and the proper arrangements have been made to ensure that we are a legal service.

Current number of active users?

We currently have nearly 4,500 members in our system. We’re growing at a rate of around 75 to 100 members a day on average, as well.

Vision for the future of Grooveshark? Plans for improvement/enhancement?

We have a lot of big plans for tons of new features in the future, but in the short term we’re working on a better way to organize content (splitting up “songs” into separate “songs” and “files” to cut down on redundant data), a new JavaScript-based song information browser, a new corrections system that allows more control over data input, etc. Past that, we’re going to be doing a lot of work with expanding the capabilities of playlists within Grooveshark, as well as adding some cool new community features.

Is there anything else you’d like to say or mention?

We would like to say that it’s very important to build our community as much as possible in order to ensure that Grooveshark works as it’s intended to. The more people in the service, the better it gets as a whole. This is especially pertinent to every day operations, as our members are continuously correcting song tags, rating songs and befriending other members.

**If any of you out there are interested in joining Grooveshark, which is still in a BETA testing phase, please feel free to contact me and I’ll send an invite your way.

(THX again to Joshua Bonnain for the interview)

Jared Moya
I've been interested in P2P since the early, high-flying days of Napster and KaZaA. I believe that analog copyright laws are ill-suited to the digital age, and that art and culture shouldn't be subject to the whims of international entertainment industry conglomerates. Twitter | Google Plus
CCSDUDE
CCSDUDE

"everything from high-quality mp3's upwards of 512 kb/s"unless I'm somehow behind the times and mp3 iso standards have changed it's a max of 320kbsso what the hell is this PR stooge talking about?

brooksnt
brooksnt

We support all bitrates no matter how low or high for the formats we currently allow: mp3 OGG and FLAC. Also the bitrate for every song is transparent and available for the user to see allowing choice based on format and bitrate.MP3 decoders are only required to be able to read 320kbps though mp3s can technically be 640kbps (though this is rare). The "standard" only requires decoding of the 320kbps maximum but it is possible to achieve higher bitrates.-Nathan Thompson [email protected]

meyou123
meyou123

It does sound like a decent propositionthough I have always considered a buck a song extremely high with all of the free p2p programs out there.If free p2p did not exsist I may have a different view but it does. Still it does give someone a choice if they want a legal download service.Though I for one and hoping that ad supported legal song downloading services take off rather than things like this.

soulxtc
soulxtc

@Meyou Yah I thought that was FRICKIN AWESOME! It might actually be the first album ever to be sort of shunned from OINK which I hope it is. I already pre-ordered that bad boy for 15 bones!

Nogoodpunk42
Nogoodpunk42

i'm still cautious about legality. "...proper arrangements have been made to ensure that we are a legal service." I mean I could say "I'm the king of England" but that doesn't make it so. I'll be waiting to see/hear more.

soulxtc
soulxtc

@Nogoodpunk42 From what he's told me its legit. The beauty is is that there's really no "risk" from a users perspective in that Grooveshark would be liable not the user. It's a US-based company so they've gone to great lengths to make sure that it's on the up and up.I think the record labels like it because they're getting a bigger cut of tunes than they do with iTunes. Plus they're getting a cut of downloaded tracks that may not have been legally purchased allowing them to actually make a profit from piracy.

Trunk
Trunk

Uhhhhh 100% legal for whatever 3rd tier labels Grooveshark has managed to sign up. None of the major labels have touched them with a 10 foot pole. It is most definitely NOT a legal service for ALL music. In fact it appears to be legal for about .025% of the global catalog.And it's not P2P either...it's barely as sophisticated as Napster. All Grooveshark appears to be is a whole lot of hype...they have been out for a year and can't even manage a release of their software?

brooksnt
brooksnt

@ 3I understand your skepticism but I just wanted to clear a few things up.Some of our biggest competitive advantages have yet to be mentioned. For strategic reasons we haven't disclosed many details about features we offer and features that are being developed. We have spent countless hours pouring over the details and I assure you we have considered all the aspects you have mentioned.Now with this in mind I want to respond to a couple statements you made."None of the major labels have touched them with a 10 foot pole."Interesting thought. Do you truly think the major labels would turn down an opportunity to earn money on previously pirated music? We are offering them a chance to earn revenue on music that will otherwise earn them NOTHING. I can't even comprehend what sort of logic it would take to think that a business such as the music industry would not want to earn revenue on something it previously could not."And it's not P2P either...it's barely as sophisticated as Napster."This is not the case. Our P2P software was designed from the ground up and does not work the same as Napster. In fact we are more efficient than Napster. Aside from the fact that we're legal all of the users on Grooveshark benefit from one another. Artists get paid. You get paid. Grooveshark gives people a reason to get music legally again--with all the best aspects of illegal p2p networks and none of the worst aspects of other legal music services (DRM restrictive catalogs no social environment)."All Grooveshark appears to be is a whole lot of hype...they have been out for a year and can't even manage a release of their software?"We have designed from the ground up a system that solves a problem that the entire music industry has failed to solve in a decade. We did this in less than one year with a team the size of a local YMCA basketball team. That's from nothing more than an idea to a working Beta launch.-Nathan Thompson [email protected]

brooksnt
brooksnt

@7Don't count us out yet.You make a good point with the price issue. Unfortunately for us illegal networks are some of our biggest competition. But as I mentioned previously some of our biggest competitive advantages have yet to be mentioned. Just know that we have not overlooked price as a concern for those used to getting music from illegal networks and we do have an answer for this. For the time being we just want to prove that our concept will work.But look forward to bigger better things a little further down the line.Nathan Thompson [email protected]

soulxtc
soulxtc

@Meyou I think ad-supported content may be thr future but many will always want to get music without ads even if it means shelling out a buck or two. Considering the popularity of pay sites like iTunes and such Grooevshark seems like a better deal because you can get .FLAC encoded files and music selections you may not find on iTunes.Plus you don't have to pay an extra 40cents in iTunes plus to get DRM-free tracks.

meyou123
meyou123

@8..Well I am glad the Grooveshark guy responded to my concerns. Thanks. I will look forward to what you have in store for the future.@9 Yes soul I believe that some will always prefer to pay for something a little better. I was just referring to the general population of filesharers.Have you heard about Raidoheads website crashing after they announced that their tunes were whatever the customers wanted to pay?http://news.independent.co.uk/sci_tech/article3021328.ece

CCSDUDE
CCSDUDE

@#6so anything other than open source lame playback isn't possible and no portable devices will decode themif it isn't already in your faq ya might wanna add it so wanna-be audiophiles grabbing the highest rate won't be fuming at you for wasting a buckI'm guessing not many if any have actually shared such files anyway with aac ogg flac and so on to downcovert from (all the same price right?)

meyou123
meyou123

In the article it says:The band's spokesman Murray ChalmersMr Chalmers said engineers had ironed out the problems with the website yesterday. So far he added most fans were pre-ordering the discbox and very few were trying to download the album for next to nothing.He said: "Although the idea is that you can decide what you want to pay most people are deciding on a normal retail price with very few trying to buy it for a penny."THIS GOES AGAINST EVERYTHING THE RIAA IS SAYING ABOUT PEOPLE WANTING TO JUST RIP OFF ARTISTS! There is the proof! People realize that the money is going to the ARTIST and so they gladly pay for it with normal retail prices no less. Ihope someone at the RIAA or the big four sees this and realizes that people are not the "thieves" they think they are.I think the RIAA and the big four owe people an apology for calling them thieves in the first place.

Nogoodpunk42
Nogoodpunk42

i'm still cautious about legality. "...proper arrangements have been made to ensure that we are a legal service." I mean I could say "I'm the king of England" but that doesn't make it so. I'll be waiting to see/hear more.

soulxtc
soulxtc

@Nogoodpunk42 From what he's told me its legit. The beauty is is that there's really no "risk" from a users perspective in that Grooveshark would be liable not the user. It's a US-based company so they've gone to great lengths to make sure that it's on the up and up.I think the record labels like it because they're getting a bigger cut of tunes than they do with iTunes. Plus they're getting a cut of downloaded tracks that may not have been legally purchased allowing them to actually make a profit from piracy.

Trunk
Trunk

Uhhhhh 100% legal for whatever 3rd tier labels Grooveshark has managed to sign up. None of the major labels have touched them with a 10 foot pole. It is most definitely NOT a legal service for ALL music. In fact it appears to be legal for about .025% of the global catalog.And it's not P2P either...it's barely as sophisticated as Napster. All Grooveshark appears to be is a whole lot of hype...they have been out for a year and can't even manage a release of their software?

brooksnt
brooksnt

@ 3I understand your skepticism but I just wanted to clear a few things up.Some of our biggest competitive advantages have yet to be mentioned. For strategic reasons we haven't disclosed many details about features we offer and features that are being developed. We have spent countless hours pouring over the details and I assure you we have considered all the aspects you have mentioned.Now with this in mind I want to respond to a couple statements you made."None of the major labels have touched them with a 10 foot pole."Interesting thought. Do you truly think the major labels would turn down an opportunity to earn money on previously pirated music? We are offering them a chance to earn revenue on music that will otherwise earn them NOTHING. I can't even comprehend what sort of logic it would take to think that a business such as the music industry would not want to earn revenue on something it previously could not."And it's not P2P either...it's barely as sophisticated as Napster."This is not the case. Our P2P software was designed from the ground up and does not work the same as Napster. In fact we are more efficient than Napster. Aside from the fact that we're legal all of the users on Grooveshark benefit from one another. Artists get paid. You get paid. Grooveshark gives people a reason to get music legally again--with all the best aspects of illegal p2p networks and none of the worst aspects of other legal music services (DRM restrictive catalogs no social environment)."All Grooveshark appears to be is a whole lot of hype...they have been out for a year and can't even manage a release of their software?"We have designed from the ground up a system that solves a problem that the entire music industry has failed to solve in a decade. We did this in less than one year with a team the size of a local YMCA basketball team. That's from nothing more than an idea to a working Beta launch.-Nathan Thompson [email protected]

CCSDUDE
CCSDUDE

"everything from high-quality mp3's upwards of 512 kb/s"unless I'm somehow behind the times and mp3 iso standards have changed it's a max of 320kbsso what the hell is this PR stooge talking about?

brooksnt
brooksnt

We support all bitrates no matter how low or high for the formats we currently allow: mp3 OGG and FLAC. Also the bitrate for every song is transparent and available for the user to see allowing choice based on format and bitrate.MP3 decoders are only required to be able to read 320kbps though mp3s can technically be 640kbps (though this is rare). The "standard" only requires decoding of the 320kbps maximum but it is possible to achieve higher bitrates.-Nathan Thompson [email protected]

meyou123
meyou123

It does sound like a decent propositionthough I have always considered a buck a song extremely high with all of the free p2p programs out there.If free p2p did not exsist I may have a different view but it does. Still it does give someone a choice if they want a legal download service.Though I for one and hoping that ad supported legal song downloading services take off rather than things like this.

brooksnt
brooksnt

@7Don't count us out yet.You make a good point with the price issue. Unfortunately for us illegal networks are some of our biggest competition. But as I mentioned previously some of our biggest competitive advantages have yet to be mentioned. Just know that we have not overlooked price as a concern for those used to getting music from illegal networks and we do have an answer for this. For the time being we just want to prove that our concept will work.But look forward to bigger better things a little further down the line.Nathan Thompson [email protected]

soulxtc
soulxtc

@Meyou I think ad-supported content may be thr future but many will always want to get music without ads even if it means shelling out a buck or two. Considering the popularity of pay sites like iTunes and such Grooevshark seems like a better deal because you can get .FLAC encoded files and music selections you may not find on iTunes.Plus you don't have to pay an extra 40cents in iTunes plus to get DRM-free tracks.

meyou123
meyou123

@8..Well I am glad the Grooveshark guy responded to my concerns. Thanks. I will look forward to what you have in store for the future.@9 Yes soul I believe that some will always prefer to pay for something a little better. I was just referring to the general population of filesharers.Have you heard about Raidoheads website crashing after they announced that their tunes were whatever the customers wanted to pay?http://news.independent.co.uk/sci_tech/article3021328.ece

CCSDUDE
CCSDUDE

@#6so anything other than open source lame playback isn't possible and no portable devices will decode themif it isn't already in your faq ya might wanna add it so wanna-be audiophiles grabbing the highest rate won't be fuming at you for wasting a buckI'm guessing not many if any have actually shared such files anyway with aac ogg flac and so on to downcovert from (all the same price right?)

soulxtc
soulxtc

@Meyou Yah I thought that was FRICKIN AWESOME! It might actually be the first album ever to be sort of shunned from OINK which I hope it is. I already pre-ordered that bad boy for 15 bones!

meyou123
meyou123

In the article it says:The band's spokesman Murray ChalmersMr Chalmers said engineers had ironed out the problems with the website yesterday. So far he added most fans were pre-ordering the discbox and very few were trying to download the album for next to nothing.He said: "Although the idea is that you can decide what you want to pay most people are deciding on a normal retail price with very few trying to buy it for a penny."THIS GOES AGAINST EVERYTHING THE RIAA IS SAYING ABOUT PEOPLE WANTING TO JUST RIP OFF ARTISTS! There is the proof! People realize that the money is going to the ARTIST and so they gladly pay for it with normal retail prices no less. Ihope someone at the RIAA or the big four sees this and realizes that people are not the "thieves" they think they are.I think the RIAA and the big four owe people an apology for calling them thieves in the first place.

Kallahann
Kallahann

Groove shark is Awesome www.reverbnation.com/hannmusic

Nikko Gibler
Nikko Gibler

I recently started to use Grooveshark to make themed playlists that I then post on my blog for my readers to listen to. I think Grooveshark is great but I haven't really used it to either upload or download any music. I stick with streaming and if I am not mistaken, that is not a gray area. Right? Check out the way I post my playlists here... There's only 2 right now.. But be sure to listen.... You very well may enjoy it!http://gibler.wordpress.com/category/playlist-2/



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