Creating a Legal Alternative to the Illegal Networks

Published by on April 19, 2008

Exclusives are the common trade practice for most industries to help companies get a competitive advantage over others. AT&T and the iPhone, the Super Bowl on FOX, Madonna on Verizon, etc.

Now for the first two, the exclusives make sense. You can’t use an iPhone on Verizon and you can’t watch the Super Bowl on CBS, and after the game is over, the content is pretty much worthless. But for music, the exclusivity lasts only as long as the first song downloaded. As soon as one person buys the song from Verizon, it jumps onto the intranets and is available for anyone to download.

There is no legal alternative

Okay, so now we have the new Madonna song available for download exclusively on Verizon’s network and on Limewire. For users who, like me, who have T-Mobile, I’m not going to sign up for Verizon’s service to download the track. And if I want to legally purchase this track, that is my only option, so by default I’m forced to download the track illegally simply because I have no other option.

So in this scenario, Madonna (and her entourage), have lost out on a sale simply because I have no legal means of purchasing her track. If the track gets released on all the networks a week later, it’s too late, I’ve already downloaded the song from Limewire, and as good of a citizen as I am, it just feels stupid to pay again for a track I already have.

And that is the exact problem Grooveshark is trying to solve: we want to give fans a legal alternative to the illegal networks. iTunes only has 6 million songs in their catalog, and Gracenote has 80 million songs on file, and for the majority of music customers, they either turn to iTunes or Limewire for their download needs.

Where do you stand on this issue? Love to hear from you in the comments –