The Media Institute
By Professor Peter S. Menell
Herman Phleger Visiting Professor of Law (2011-12), Stanford Law School
Robert L. Bridges Professor of Law and Director, Berkeley Center for Law & Technology
University of California at Berkeley School of Law
As fans of the 1970s television hit “Happy Days” will recall, the final curtain became inevitable when a water-skiing Fonz, wearing swim trunks and his trademark leather jacket, jumped (à la Evil Knievel) a confined shark to prove his manliness. Although the show continued for several years after this ridiculous stunt, it rapidly descended from an entertaining coming-of-age sitcom set in a 1950s Midwest suburb to a parody of television programming that had exhausted its premise. The phrase “jumping the shark” came to symbolize the point where a brand, design, or creative effort moves beyond redemption.
We may be approaching another “jump the shark” moment, this time in the music marketplace. In 2007, three enterprising University of Florida undergraduate students launched Grooveshark, a music streaming service. Grooveshark hosts music files “uploaded” from its user base onto its servers and streams this music on demand. Grooveshark even offers a “Popular” button on its “Explore” page that reveals the most popular files within the library. (Until recently, the “Popular” button appeared on Grooveshark’s homepage.) Not surprisingly, the most popular songs are major-label releases. The three most popular songs on Grooveshark are LMFAO’s “Sexy and I Know It,” Rihanna’s “We Found Love,” and Flo Rida’s “Good Feeling.” LMFAO’s and Rihanna’s releases are part of the Universal Music Group (UMG) catalog. Flo Rida’s music is controlled by the Warner Music Group (WMG). The “Play All” button cycles through the list.
Grooveshark boasts 15 million songs on its site and more than 35 million registered users. Grooveshark streams more than 100 million songs per month. It earns income from advertisements on its website, subscriptions, and mobile apps. Grooveshark Plus ($6 per month, $60 per year) provides additional functionality and removes advertisements from the user interface. Grooveshark Anywhere ($9 per month, $90 per year) offers access to the Grooveshark mobile applications on Palm, Nokia, and BlackBerry devices).
Although Grooveshark eventually negotiated a deal with EMI, it never obtained licenses from the other major record labels: UMG, WMG, and Sony. (UMG recently agreed to acquire EMI’s record divisions.) So how does Grooveshark maintain a reliably available catalog containing substantially all of UMG’s, WMG’s, and Sony’s recordings?