Bummer: All major music publishers are now suing Grooveshark (update)

EMI, one of the largest music publishers in the world, is suing streaming music service Grooveshark over a discrepancy in royalty payments.

Grooveshark is different from other prominent streaming music services like Spotify, MOG and Rdio because it doesn’t have broad licensing agreements to play the majority of its music. It depends on its users to upload music that can be enjoyed by the community. If a user uploads a file that he or she doesn’t own and it gets a DMCA complaint, Grooveshark takes the file down.

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To date, Universal Music Group, Sony Music and the Warner Music Group have filed a lawsuit against Grooveshark for allegedly pirating thousands of songs through its streaming service.

Now EMI is accusing Grooveshark of not paying any royalties since entering into a streaming music licensing agreement in 2009, according to a Reuters report. This means that all four of the major music companies are now tied up in legal disputes with Grooveshark for one reason or another — making the music startup’s future look mighty bleak.

Grooveshark estimates that it owes EMI about $150,000 in fees. EMI, however, says that the amount owed is much larger and that Grooveshark has “continued to exploit” its copyrighted music while ignoring demands for both accounting statements and payments. We’ve reached out to Grooveshark for comment and will update this post with any new information.

Gainesville, Fla.-based Grooveshark has over 30 million active monthly users who stream more than 15 billion songs per year, according to the company. In November, the company rolled out a new design of its online music player that includes a social layer.

Update: 11:00 a.m. PST

A Grooveshark spokesperson responded to our inquiries about the accusations by pointing out that EMI music publishing (not the record label) is the organization currently disputing the royalty payments. The spokesperson also clarified that EMI filed a formal complaint (not a full lawsuit) with the New York State Supreme Court. Here’s a copy of the full court document: EMI Entertainment World Inc v. Escape Media Group Inc, New York State Supreme Court, New York County, No. 650013/2012 (PDF).

Official statement from Grooveshark below:

“We make regular payments to EMI. This is a contract dispute with the Publisher EMI (not the record label) that we expect to resolve.”