EMI Drops Suit, Signs Licensing Deal with Grooveshark

Music streaming may not be a booming business just yet but things are looking up. Upstart Spotify has been making waves in Europe and Pandora is solidifying its business model in the US. Now we have another sign that things may finally be heading the right way, as major music label EMI has not only dropped the lawsuit against the music streaming service Grooveshark, but it has actually signed a licensing deal with the startup.

“EMI Music and EMI Music Publishing have collaborated with us to create a mutually sustainable deal which represents the future of digital music,” Grooveshark CEO Sam Tarantino said. “We will continue to deliver the best music service on the Internet to our users, and we will expand our capacity to strengthen fan-to-artist connections through our technology.”

“We think services like Grooveshark offer great music discovery options for fans,” Mark Piibe, EMI Music’s Global Head of Digital Business Development, responded in the exchange of pleasantries. ”In turn, Grooveshark offers a new revenue stream for our artists and will help us learn more about how we can better connect different types of fans with artists.”

Grooveshark is a web-based music streaming service that allows users to play tracks on demand. There are millions of songs to choose from but, so far, the service has failed to secure any licensing deals with any of the major labels despite positioning itself as a legal alternative to more dubious services. Grooveshark had in fact been in advanced talks with EMI for the licensing rights but things took a turn for the worse several moths ago when the label sued the music streaming service for copyright infringement.

Of course, lawsuits are part of the negotiation when it comes to the music business so the two companies are now best friends again. There aren't any details on the terms of the agreement, which only covers the US, but it’s safe to assume that EMI is getting the sweeter deal. Surprisingly though, the service, despite having several hundreds of thousands of users worldwide, hasn't secured any other licensing deal with the major labels but it hasn't been sued either.