Grooveshark All Set To Take On Pandora Legally With Its Online Radio App

Grooveshark is launching a new model for its streaming music service, based on government-mandated royalties. The streaming service will cost $1 month and will be free of advertisements. 

Escape Media's Grooveshark will be launched on iOS and Android as an app called Broadcasts. Users of the service will be able to create and share streaming radio stations. The app will also offer texting ability, allowing users and disc jockeys to chat with one another within the app. 

The company will also pay royalties to music companies for every song it plays and these all steps are being taken to prove to everyone that the company is trying to be a "legitimate player." 

"We're trying to show that we're doing everything we possibly can to be a legitimate player here," said Grooveshark Chief Executive Sam Tarantino. 

Grooveshark has been battered by lawsuits and its app was taken down by both Google and Apple after copyright owners complaints. 

Grooveshark model is similar to that employed by Pandora which is instead of negotiating with each record company separately, Grooveshark will pay government-mandated royalty rates. However unlike Pandora, Grooveshark's Broadcast will not feature any commercials. 

Spotify and other music streaming services directly deal with each music label. 

Spotify's monthly fee for premium service is 10 times more expensive than Grooveshark. Tarantino said he hopes his company's new product is cheap enough to lure people in and priced high enough to drive significant revenue. 

Grooveshark's Broadcast has the potential to challenge Pandora by offering a chat feature and commercial-free app, but given the user base Grooveshark with 30 million users, and Pandora with 77 million users, it should take a while.