How Grooveshark Works

This is a cross-post from the discussion board on our new Facebook group, Grooveshark for Artists. As Moneyshark gets closer and closer to launch, we are beginning to do some artist outreach to let everyone know how Grooveshark really works. Moneyshark is the backend portal provided for free to all registered rights holders (artists, labels, publishers, etc). It provides detailed information about your sales and streams over time, and more.

From http://www.facebook.com/topic.php?uid=9816079946&topic=5644

In this post, I will try to describe how Grooveshark and Moneyshark works from the perspective of the artist.

Grooveshark.com is the interface for discovering, finding, sharing, and buying music. The music available is determined by the user's own music libraries. When users download the Sharkbyte application, they tell it where their music is. Sharkbyte then scans their libraries, and tells Grooveshark about the new songs.

When a user on Grooveshark finds a song, they can play the entire thing via the web-based SharkPlayer. Anything longer than 30 seconds counts as a full stream, of which we pay royalties for ASCAP, BMI, and SESAC artists.

Only if they want to download the actual song file do users need to purchase the track. When a track is purchased, the data for that track is sent to Moneyshark, which is then associated with that artist/label's account.

A portion of that purchase goes to the user who contributed the song that was sold to the system, as credit, which they can use to buy more songs. This is mostly an incentive for people who are used to pirating music. With enough unique files, a former pirate could actually start making money by adding all of their files to their Grooveshark library.

This is how we need to think about "pirates": in Grooveshark, they become Hosting Providers. Storage and bandwidth are expensive, so we reward users for allowing us to use some of theirs. (which is the whole point and benefit of peer-to-peer technology). With that reward, they can in turn use that credit to "buy" songs on Grooveshark for free, however the artist still gets paid for that purchase because it comes from re-compensation.

The rights-holders portion of the purchase is placed into the "Pending Balance" section of Moneyshark, and will be paid out after the next month's computations.

The current breakdown of payments go like this:
60% for the song rights holder
25% for the user who hosted the song (potentially you)
15% Grooveshark admin fees.

Other Notes:

-There are no membership fees of any kind. Unless stated otherwise, all features of Moneyshark are free to registered Rights Holders.

-Balances are computed and paid out on a monthly basis. Checks go out on the first of the month.

-Each payment from us to you is tracked in Moneyshark, and you will be able to view a breakdown of all artists, albums, and songs for each payment.

-Moneyshark will help you manage your songs, albums and artists metadata on Grooveshark, and will provide alternate methods for uploading music into the system.

-Moneyshark will become the interface for managing your official content on Grooveshark, including album art, bios, links, and more.

-Labels will be able to create sub-accounts to allow their artists to log in to see their individual sales.

-Raw sales data is available to download in CSV format, more formats to come. An API is also in the works.

If you have any questions about Moneyshark, you may comment here.