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Grooveshark was a free web-based music application that enabled internet users listen to music on-demand.
2006 – 2015 Gainesville, FL
Founded by Sam Tarantino, Josh Greenberg, Andres Barreto
Raised $4.28M million in 2 rounds
Backed by 4 investors
Reasons for Failure
The site was shut down due to a legal settlement between copyright owners and the company. They were accused of illegally sharing 5,000 songs and could have otherwise faced a $736 million fine.
Legal issues were not enforced by leaders from the beginning. Users were able to download their own songs to the service even though they did not hold the rights, taking advantage of Safe Harbor in the Digital Millennium Copyright Act, DMCA.
The app was removed from the Apple App Store, Google Play and Facebook, which forced the team to go back to developing for the desktop when all their users were moving to mobile.