Can anyone explain exactly why this is sinister? If the label is aware of the price they're selling the license at and buying the data, where is the unfair deception?
Who could have guessed that basing a business on copyright infringement might get you sued for copyright infringement?
This suggests they were getting the label's data from the label and paying the label.
That seems like a license to me.
They could then use the data gained from (infringing) streaming/uploads as a bargaining chip while negotiating the license.
I read it as, "we license their songs, and then we license the usage data back to them at a higher rate once it reaches some threshold."
You apparently read it as, "we infringe until we have enough usage data, and then we negotiate a contract where they pay us."
The few ambiguous parts are,
1. Whether "we use the label’s songs" means to license or to infringe.
2. Whether "the data we got from them" is licensed or infringement.
3. Whether "what we pay them" means what they had paid in license fees up to that point, or the terms of the negotiated license.
> we are achieving all this growth without paying
> a dime to any of the labels
> In our case, we use the label’s songs till
> we get a 100 (million) uniques
In their business plan, they take a loss for licensing up front, but eventually net positive by licensing the data back to the labels.
Contrast with, e.g., Spotify, who nets a loss with the labels.
"Let’s keep this quite for as long as we can."
also,
> they take a loss for licensing up front
doesn't seem like the correct interpretation, because they say
"we are achieving all this growth without paying a dime to any of the labels"
If you're getting a good deal with competitive advantage, you often want to keep that quiet -- and it doesn't imply you're doing anything wrong. Now if they statement ended with, "or we could all up in jail" then that would imply they were doing something wrong. This just sounds like they found a sweet deal and wanted to make sure they could milk it with as little cost for as long as possible.
What do you mean? How did you arrive at this conclusion?
Whether they are obligated to "report streaming data" is up to their contract, not ethics.
There is no contract.
Users upload the music the service is streaming to everyone. Most of that music is copyrighted and the company has no license (or any other contract) allowing them to stream it.
They expected to eventually be sued by one or more labels for doing this. They also expected to have enough data by then to use it to negotiate a contract where they actually make money while legally licensing the music.
Did I miss this part? Source, please.
Common sense, Wikipedia, previous lawsuits against the company, this lawsuit in question. Feel free to Google. It's not all unlicensed, but their catalog is built upon user uploads (and from previous court cases, from their own execs uploading music they have no license to), not just a database of music they licensed like a legal music store/service.
The UMG lawsuit alone alleges Grooveshark employees uploaded over 100,000 files they had no license to. There was no contract then, they just expected to have enough listening data to make a profitable licensing deal on that music... which might've worked if it didn't come out in discovery of a year old lawsuit that it was Grooveshark employees and not users that uploaded so much of the music. No DMCA protection for that.
They already said Grooveshark intends to fight this battle before the Court, not in the press, so we are threading on thin assumptions here.