Grooveshark Sells Song Plays, Marketing Tools to Artists

Grooveshark founder Sam Tarantino was driving by a used record store one day and decided to try to create a virtual version where people could upload their music and others could pay to download it, with a portion of that sale going to the person who put it there. A nice, albeit complex thought that has morphed recently into a music site where you can stream any song you want to hear.

Online music sites can be divided into two basic groups – there are sites that let you listen to songs on demand, build playlists, and control exactly what you hear; and there are sites that are online radio controlled by the listener. Internet radio stations have compulsory licensing, meaning anyone can be licensed to start one, but requirements include established performance royalty payments, as well rules as to how many songs by one artist can be streamed within certain amounts of time. On demand sites don’t follow those rules, and the licensing is not automatic, instead they must negotiate licenses with the record companies.

groovesharkGrooveshark is an on demand streaming music site. They have an “experimental” license with the record companies which allow them to stream songs on demand and share revenue with the labels and artists based on how often a certain song or artist is played, according to a “Master Rights Agreement.”

Grooveshark is streaming 50 to 60 million songs per month to more than 400,000 users. Their audience is growing at a rate of 2 to 3% per day. When you visit the site and type in an artist, you get a list of songs that you can choose to hear, put in a listening queue, or embed in a web page.

Recently, Grooveshark has launched a new service called Grooveshark Artists which is designed to complement the streaming on demand site and give independent artists a chance to find an audience. For $500 an artist can purchase 5000 song plays on Grooveshark. The songs will be played to listeners who have chosen to listen to other songs or artists similar to theirs. Listeners can rate the songs, and artists can see how the audience is responding to their music.

Grooveshark Artists has integrated a partnership with Creative Commons into the site so that artists can choose the permissions they want and appropriately license their music. Other partnerships are designed to help the independent artist as well – such as ticket sales with Showclix, fund raising partner Sellaband, lyric posting services from lyrics.com, and interactive store options for music downloads and more from Bandcamp.

Jack DeYoung, VP of Label Relations for Grooveshark, says they want to make Grooveshark Artists work for musicians. “Making sure the artists get paid has been a priority for us from day one.  We have a master’s agreement that they can sign when they sign up that ensures they’re being adequately paid for their songs being played on Grooveshark.  We also have a litany of partnerships with companies that give bands the opportunity to help fund and sell their music”.

It’s working according to Khamelien, a hip-hop/reggae artist who paid $500 per month for a 3 month campaign on Grooveshark Artists. He got 21,000 song plays and over 2500 fans from the campaign. According to his record label Goin’ Native Records; they saw a significant increase in iTunes sales as a result.

When they sign up, musicians can pick the amount they want to spend, choose to have a banner appear when their song plays, pick certain artists that they want their songs to play after, and more. It’s a great way to find listeners who are likely to like your music, and make a connection. Grooveshark Artists is all about connecting musicians with listeners and offering them tools to help them market themselves. It’s an idea that enables artists to circumvent the stifling music industry. Given all the bad press about the record labels these days, it seems like an idea whose time has come.

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