Sony Music (s SNE) and Warner Music are about to sue streaming music service Grooveshark for copyright infringement, the New York Times reported on Thursday. The two major labels would be joining Universal, which sued Grooveshark’s parent company, the Escape Media Group, last month.
A joint legal front of the three majors is a bit of déjà vu for anyone who has been following the online music space over the past couple of years: Big music companies used to regularly join forces to pursue legal actions against numerous file-sharing companies like Napster, Grokster, iMesh and many others. However, the last of these lawsuits ended earlier this year with a settlement between LimeWire and the labels. LimeWire had closed shop over a year ago after being handed a permanent injunction. Now it looks like the majors may have moved on from the P2P space, targeting cloud music providers instead.
So why would Sony and Warner sue Grooveshark? The service is essentially a competitor to Spotify, something that became even more apparent when Grooveshark rolled out a major revamp that focuses on social network integration last month. However, unlike Spotify, Grooveshark doesn’t have licensing agreements with all rights holders. Instead, it offers users a chance to upload music and responds to take-down requests from rights holders, much in the same way that YouTube (s GOOG) removes infringing videos from its site.
Grooveshark has struck deals with EMI and numerous indie labels; the company’s SVP of external affairs, Paul Geller, told me a few weeks ago that it is signing up between 10 and 20 labels per month. Universal, however, argued in its lawsuit that Grooveshark’s intent is to profit from infringement and that its employees as well as its executives personally uploaded countless songs to grow the site’s catalog.
The question is: With Grooveshark’s being sued by all three big majors and EMI’s being sold to Universal Music and Sony, will we see a return of the music industry lawsuits against online services? Back in the heyday of file sharing, the RIAA-led labels literally sued dozens of P2P operators out of existence.
These days, things are a little different, as many streaming music providers have been striking deals with the labels before launching their services. However, a possible victory over Grooveshark could embolden the labels to go after other unlicensed cloud services as well.