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Grooveshark Gives Users Free Listening (No Catch) And Profit

Posted in Business Models, Funding, Moguls, Music Industry, Services, Startups by Alex Lindahl on April 26th, 2008

Founded in 2006 by three University of Florida students with plans to shake up digital music distribution, Grooveshark is a P2P file sharing service that allows users to upload tunes, easily search and listen to any song in full (unlike Last.fm and other players in the space), share and receive recommendations and purchase DRM-free music at a fair price, knowing that the copyright holder will be paid.

However, the big punchline is that if a user purchases a song from your library, Grooveshark will give you a portion of the profits (now equal to their share, I might add). Granted the profits are distributed as store credit, but the reward certainly bests no kickback at all. Additionally, members will be compensated with store credits for community participation such as fixing bad song tags, flagging unwanted files, and reviewing concerts.

A little over a week ago, the music-sharing startup launched Grooveshark Lite, which provides access to all the songs in Grooveshark’s library. There is no way to put it lightly: I’m addicted. Grooveshark has given everyone, whether you are registered or not, access to all of the high quality, full-length songs in its library entirely for free in a beautifully designed user interface. You can even queue up songs and create playlists:

Grooveshark Gives Users Free Listening And Profit

Grooveshark’s parent company Escape Media Group has reportedly raised $1.5 million from friend, family, angel, and institutional investors, and has grown a team of forty employees who clearly make a collective effort toward a quality product. Normally I would be concerned about music-sharing giants such as Amie Street (also on a variable pricing model) and Last.fm, but I believe that Grooveshark has the potential to surpass them. The UI is superior to any other service I have encountered (next to iTunes) and the free-of-cost, DRM-free, full-length listening model with the store credit kickbacks makes for killer combo. The company has been growing the usership at intentionally slow rates, but while you are waiting for the registration confirmation, get a little preview at the lite version.

Rate Grooveshark

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42 Responses to 'Grooveshark Gives Users Free Listening (No Catch) And Profit'

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