For almost a decade, Grooveshark has been a popular free music streaming service, growing to around 35 million users. The site allowed people to upload music, which other users could search for and stream to their hearts' content - but inevitably, the giants of the music industry were somewhat less delighted about their copyrighted content being shared without being paid their dues.
Music labels have been fighting Grooveshark's parent company, Escape Media, for several years. But the legal battle finally reached the end of the road following a US District Court ruling last week - as Reuters reported, the judge determined that Grooveshark's copyright violations were "willful" and made "in bad faith", confirming that jurors in an upcoming trial would have the option of awarding the maximum statutory damages permissible.
A potential ruling against the company would have left it liable to pay up to $736 million in damages. With that threat hanging over its head, Grooveshark shut down its operations last night, posting an apology to its users:
We started out nearly ten years ago with the goal of helping fans share and discover music. But despite best of intentions [sic], we made very serious mistakes. We failed to secure licenses from rights holders for the vast amount of music on the service.
That was wrong. We apologize.
As Re/code points out, Grooveshark always maintained that its service was similar to YouTube, claiming that users made the choice to upload songs, but that the company itself was not involved in that decision - a position that would give it some protections under the Digital Millennium Copyright Act (DMCA).
But it was soon established that Grooveshark employees had themselves uploaded thousands of copyrighted songs, somewhat undermining the company's argument.
Under a negotiated settlement with leading music labels - including Universal Music Group, Warner Music Group and Sony Music - Grooveshark has not only shut down its operations, but has also surrendered ownership of the site and 'wiped clean all the data' on its servers. Escape Media won't actually have to pay the labels a penny, as long as it doesn't violate the terms of its agreement - but if it fails to adhere to the agreed terms, it will have to pay the labels $75 million.
The full apology and shutdown notice, which includes a somewhat awkward recommendation to pay for your music and "use a licensed service that compensates artists and other rights holders" is shown below: