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Grooveshark VIP price increase planned

Company informs its VIP customers it plans to raise prices in December. Music streaming service hints that it's close to reaching a legal settlement with Universal.

One of my favorite online streaming services, Grooveshark, has begun notifying registered users that it's going to raise the price of its VIP subscription service beginning December 1. But if you sign up for VIP service before then, you'll never pay more than $3 a month or $30 a year.

Grooveshark's online music streaming service is and will remain free. The main benefit of the VIP service is support for streaming to mobile phones, including Android, BlackBerry, some Nokia phones, and Palm; you also get access to a desktop app and other benefits. The company briefly offered an iPhone app, but Apple pulled it from the App Store a few days later because of a legal complaint about unlicensed content.

And there's the rub--Grooveshark has long been in a state of legal limbo. Instead of licensing content upfront as music subscription services like Mog and Rhapsody do, Grooveshark relies on users to post content to the site. Then it forces content owners to inform it of violations under the Digital Millennium Copyright Act (DMCA), after which it takes content down. This approach worked for YouTube, which was eventually bought by deep-pocketed Google and was able to negotiate the necessary licensing deals with most major content owners. But Grooveshark hasn't been so lucky, and has been locked in various legal disputes for the last few years. The company was able to reach a licensing deal with EMI in October 2009, but got hit by Universal a few months later.

The impending price increase is part of an attempt to go legitimate, and the company hinted today that it's close to working out some sort of licensing deal with Universal. Grooveshark hasn't announced the new price for the VIP service, but given what other streaming services charge for mobile access, you can expect it to come in around $10 a month.