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"Grooveshark is an internationally-available online music search engine, music streaming service and music recommendation web software application, allowing users to search for, stream, and upload music free of charge that can be played immediately or added to a playlist. Grooveshark streams 50 to 60 million songs per month, to more than 400,000 users. As of April 2009, its audience was growing at a rate of 2 to 3% per day." [1]

a radical new service that attempts to fuse community services and P2P music file sharing with a product that will motivate users to share music files and simultaneously accrue credits towards music purchases from the process. [2]


Business model:

"we have also decided to share a percentage of each sale with the people actually sharing the music. Thus, if you upload a song and someone downloads it from you part of the money goes to the copyright holder, part does to us and the rest is credited to your account." (

More in-depth explanation:

"Grooveshark requires the user to download a Java app that interfaces between the Web service and your library of tunes. The site operates like a music laundering service, no questions are asked as to where the tracks came from, but when one of your contacts chooses to download the track from your computer, Grooveshark will bill your contact for the full cost of the track and then pay a share of the money to the label and credit a portion to your account against future purchases.

The planned model will see users uploading tracks which they can trade with other users, regardless of the source of the track, once exchanged on the site the copyright holder will be compensated for any transaction made with the track. According to Grooveshark Chief Technology Officer, Josh Greenberg, the site will work on a 50/50 revenue model split between the site and users once deductions for costs have been made.

In order to monitor sales of tracks through a P2P network, Grooveshark have developed an additional reporting system, titled 'MoneyShark' in order to provide relevant data to record labels, artists and other rights holders. Greenberg said that the system will work in conjunction with their accounting team to ensure that both verified and unverified tracks can be identified. "There is an entire separate system (dubbed 'Moneyshark') that we have developed to allow for labels, artists, and other rights holders to manage their content within Grooveshark," Greenberg said. "Through this system, copyright holders can manage their metadata, which is what we use to match against our existing song database." (

More Information

See Open Music Business Models