A number of Grooveshark-internal emails support Universal Music's claims that Grooveshark is building its music streaming business on a foundation of piracy.
Grooveshark apparently paid its employees for illegal music uploads. The business was a bet to escape the legal claws of Universal until Grooveshark would be able to sell user data for more money than what it would have to pay for music license fees.
The emails do not provide much in the way of new information but they do back up allegations previously made by Universal in a lawsuit filed against Escape Media Group, the parent of Grooveshark, last year. Universal previously accused Grooveshark of copyright infringement and claimed that members of management had uploaded pirated songs themselves. Escape dubbed Universal's accusations a "gross mischaracterization of information," but these emails suggest Universal was right in its allegations.
According to the emails released, Grooveshark's chairman Sina Simantob intended to build Grooveshark on the cheap, and wanted growth "without paying a dime to any of the labels." Written in December of 2009, the emails also suggested that Grooveshark could beg for mercy in the case it is accused of a crime. The goal was to use piracy to eventually grow to 100 million users then sell user data to music labels. Simantob's intention was to charge more for that data than what Grooveshark would have had to pay for music licenses.
This plan is not the only disturbing piece of information in the emails. There are also parts that support Universal's claims that Grooveshark employees may have illegally uploaded as many as 100,000 tracks to the Grooveshark library. In fact, there appears to have been a "quota" that employees had to meet and bonuses were paid to employees that exceeded that quota.
In an email addressed to venture capitalist Andrew Lipsher, Simantob wrote that he bet "the company on the fact that it is easier to ask for forgiveness than it is to ask for permission." If authentic, the internal emails indicate that Simantob, who says that Grooveshark's business is protected by the DMCA and is not responsible for copyright violations of its users, knew of the illegal foundation of the business. What makes matters worse for Grooveshark is the fact that its platform is not only used for streaming music, but there are music downloaders that hook into the platform and rip already pirated content again.