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EMI lawsuit hasn't shut down Grooveshark--yet

I wondered how Grooveshark was able to avoid the record industry lawsuits faced by other on-demand streaming companies like Imeem and Seeqpod. Turns out, it wasn't.

You know that old maxim about something being too good to be true? I wondered how my new favorite on-demand music-streaming service, Grooveshark, was able to avoid the record industry lawsuits that plagued its predecessors, such as Seeqpod and Imeem.

Is EMI's lawsuit just a negotiating tactic?

Turns out, it isn't immune. Grooveshark contacted me earlier this week to let me know that its negotiations with EMI were on the verge of breaking down. (You can read Grooveshark's official statement here.)

Yesterday evening, Peter Kafka at All Things Digital uncovered the fact that EMI had actually sued Grooveshark back in May--talk about tough negotiation tactics!

As much as I love Grooveshark's service, I have some sympathy for the labels. It seems that a lot of digital-music start-ups operate under the maxim that it's better to ask forgiveness than permission--they create the technology, launch the service, then count on the licensing details being worked out later.

Although I think that the labels have been incredibly short-sighted about the move to digital music, particularly on-demand streaming, they can't sit back and let every new digital-music start-up dictate its own terms--it's not fair to copyright owners, nor to online-music companies like Rhapsody, Pandora, and (now) Imeem, who are playing by the rules and probably paying higher royalties.

Hopefully, this lawsuit is just a negotiating tactic, and Grooveshark will emerge with the kind of business arrangement that Imeem was able to strike with Warner.

So far, EMI's threat doesn't appear to have had any effect on the service: I was still able to find songs from EMI artists like The Beatles, Radiohead, and--of course--the Sex Pistols.

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