Sometime in early 2006, Josh Greenberg, a freshman at the University of Florida, began attending meetings at a school club for budding business types. The son of an electronics repairman, Greenberg was a model junior entrepreneur. In high school he’d run a small web design business; at 17, he’d incorporated it, printing his first run of business cards. Underage, he couldn’t legally serve on his company’s board of directors, so he appointed his grandfather as chairman. Now 19, Greenberg was looking to build something more concrete.
Having come of age in the dot-com era, Greenberg was invested in the myth of the dorm-room billionaire. In the late '90s, audacious entrepreneurs had built billion-dollar businesses in direct violation of copyright law, and they had flourished. One should move quickly, drop out of college, break the rules. Greenberg did all three, building a digital music platform that was years ahead of its time. Called Grooveshark, it helped sparked the music streaming revolution, and for a brief time in the late 2000s, it looked poised to eclipse iTunes, BitTorrent, and maybe even Spotify as the platform of the future.
GROOVESHARK LOOKED POISED TO ECLIPSE ITUNES, BITTORRENT, AND MAYBE EVEN SPOTIFY
But Greenberg’s ambition blinded him to a quiet but enormously important shift — after years of acrimonious opposition, the technologists and the rights holders were beginning to cooperate. Behind the scenes, the creative industries were recapturing their ability to protect the flow of information. This shift was subtle at first; even most of the pundits missed it. With time, though, it became clear that Grooveshark was on the wrong side of the trend, and that the service was doomed. Earlier this spring, it streamed its final song.
Then, last Sunday, Josh Greenberg was found dead in his home. The cause of death could not immediately be determined; it will be some time before a toxicology test provides the final answers. He had no history of illness, and his family said he had seemed upbeat about new ventures in the weeks before his death. Whatever the cause, his passing represents the end of an era — a bookend to a more radical chapter in the history of the internet.
Image courtesy of Gavin Doran
Back in 2006, Greenberg didn’t even have a business plan. Instead, he simply showed up at the campus entrepreneurs’ club, prepared to offer his programming skills to anyone with a good idea. There he met another freshman, Sam Tarantino, who had a radical proposal — in the aftermath of Napster, he was going to get people to pay for music again. By combining Tarantino’s managerial ambitions with Greenberg’s technical skills, the two could make music piracy obsolete.
A MORE EXPERIENCED BUSINESS PARTNERSHIP MIGHT HAVE CHOSEN A LESS AMBITIOUS GOAL
It was not immediately clear how this was to be accomplished; a more experienced business partnership might have chosen a less ambitious goal. But Greenberg and Tarantino were young and eager to swim in the deep end. Within a few months, they’d incorporated a company, Escape Media Group, and debuted the earliest version of Grooveshark: a limited-use file-sharing application that offered some basic social networking capability alongside the ability to pay for downloadable mp3 files. It failed. They pulled it, added some functionality, and relaunched Grooveshark in beta. That failed, too. This was the mid-2000s, the high days of Kazaa, LimeWire, and BitTorrent. It was hard to compete with free.
In late 2007, Grooveshark’s founders went back to the whiteboard. They were still college students, but now they had a couple years of experience and were learning to focus and think strategically. They realized their product was too complicated, and decided to focus on just one specific feature. Inspired by the success of YouTube, Greenberg and Tarantino reasoned that a next-generation shouldn’t sell mp3s at all. Instead, it should stream them, just as YouTube did with videos. And rather than selling files, they’d sell advertising, or, for premium users, even subscriptions. That way, they could subvert the pirates by abandoning the download model entirely.
"We thought of the main silos of content on the internet," Greenberg would later say, "If you want photos, you go to Flickr or Google Images; if you want videos or shows, you go to YouTube or Hulu; but if you think music, there is no place to go to."
The Grooveshark streaming application launched in April of 2008 — several months ahead of Spotify. The service proved explosively popular from the outset. Users, especially younger users, loved on-demand music delivery, and Greenberg left school to focus on Grooveshark full time. But there was a problem: Grooveshark still relied on peer-to-peer infrastructure similar to Napster, Kazaa, and bitTorrent. In other words, although it functioned as a streaming service, it still sourced the music from its users’ file libraries. And to the record companies, that looked like copyright infringement.
THE COMPANY STRUGGLED TO MAKE PAYROLL
Without approval from the labels, Grooveshark struggled to attract venture capital. In its first five years of existence, the company raised just under a million dollars. In the same time, Spotify, with equity buy-in from the music majors, raised a hundred times as much. Even as Grooveshark grew to nearly 30 million registered user accounts, the company struggled to make payroll.
From a technical perspective, of course, Grooveshark was excellent. The peer-to-peer architecture outsourced the distribution work to the users, and this decentralized approach allowed Greenberg, now the company’s CTO, to serve the world on a pauper’s budget. But, having dropped out of college, he was still working out of a low-rent office in Gainesville, Florida. The company, for all its popularity, was still run by kids. Without investment from venture capital, it couldn’t attract veteran managers.
Grooveshark tried to go legitimate. In 2009, It signed a contract with EMI, one of the world’s largest music companies, promising to pay out royalties for the songs that users streamed. But rather than saving the company, the deal revealed an embarrassing lack of professionalism: EMI would later complain that, over the course of three years, it was never once provided with an accurate account of what had actually been streamed. Eventually, EMI sued Grooveshark. So did every other major music company.
A crackdown followed. Grooveshark applications were removed from the Apple App Store and Google Play, and booted from Facebook. The service began dropping users. In response, Grooveshark, under Greenberg’s technical direction, went back to the web, building a richly featured HTML5 application. This prevented the tech giants from blocking the service. But it also meant that, as the rest of the world was going mobile, Grooveshark was moving back to the desktop.
"I AM LIKE LITERALLY BROKE."
Meanwhile, Spotify grew exponentially, stealing Grooveshark’s users. The Swedish service was especially popular among the desirable under-25 demographic; after a decade of free music, young people had started paying again. Piracy was going obsolete, just as Greenberg and Tarantino had always envisioned — only Grooveshark wasn’t responsible. By early 2012, the company’s active user base had been cut in half. In 2013, Tarantino told a reporter from Mashablehe was "literally broke. I am like literally broke and am trying to lower my rent."
In September 2014, the execution writ was signed. A federal judge determined that Grooveshark’s peer-to-peer streaming approach was a flagrant violation of copyright law. The undercapitalized company now owed the major labels enormous damages — damages it could never hope to pay. On April 30th, 2015, Grooveshark went dark. In a post to the company’s website, the Grooveshark team explained how they had given all they had — their patents, their websites, their copyrights — to the record companies as a belated kind of compensation. "We failed to secure licenses from rights holders for the vast amount of music on the service," they wrote on Grooveshark’s landing page. "That was wrong. We apologize. Without reservation."
Image courtesy of Michael Vroegop/Flickr
Three months later, Josh Greenberg, the brains behind the world’s first on-demand music streaming service, was found dead in his home. He had spent the last nine years of his life — his entire adulthood — building a successful and popular service, only to watch it end in disgrace. The company he’d founded was ruined, and the promised billions never came. He was 28 years old.
Greenberg was not a criminal; he was not even a profiteer. He had not, like Kim Dotcom, attempted to locate his business, or himself, outside of the United States. Nor, it should be said, was he a hero. He was not an Aaron Swartz or Edward Snowden, liberating privileged information from corrupt structures of governance. He was just a businessman. He was a young entrepreneur.
He had violated the tenets of intellectual property law, of course, but there was precedent for that. Nullsoft’s Justin Frankel had coded Winamp without licensing the underlying mp3 technology; YouTube’s Steve Chen and Chad Hurley had looked the other way as users had uploaded thousands of infringing videos; Napster’s Shawn Fanning had acted as if the entire concept of copyright was obsolete. Greenberg resembled them. He was a scion of middle-class America; he’d attended a state school; he was young, and male, and comfortable with the internet’s culture of appropriation. The template was to move fast and to break things, and to let the lawyers figure out the repercussions once you’d earned your millions.
WITH A LITTLE LUCK, THE COMPANY MIGHT HAVE OUTMANEUVERED SPOTIFY
If Grooveshark had debuted in 2003, or maybe even 2005, he might have gotten away with it. Like a claim-jumper in the 19th century, Grooveshark could perhaps have emerged from the era of digital lawlessness with enough leverage to force the music companies to the negotiating table, and borrowed enough expertise from the venture capitalists to become a functional business. With a little luck, the company might have outmaneuvered Spotify, and Greenberg would have been a business icon.
And even if Grooveshark had failed in those days, Greenberg could have had a sunny future. He certainly wasn’t the first businessman to launch his career at a quasi-legal file-sharing service. Facebook’s Sean Parker had done so; so had Uber’s Travis Kalanick; so, even, had Spotify’s Daniel Ek. For internet executives of a certain generation, a failed stint in the peer-to-peer space was like an alternative to an MBA.
But by the time Grooveshark actually debuted its streaming application, in 2008, the frontier had closed. Indeed, the most surprising thing about the service was that it lasted as long as it did. A mid-2000s peer-to-peer service was raffish, but still viable; a mid-2010s peer-to-peer service was sordid, possibly untouchable. Grooveshark was the last major operator in the space, outlasting Kazaa, LimeWire, and dozens more, and Greenberg’s long-time association with the company may have irreducibly stained his reputation.
THE LEGEND OF THE RULE-BREAKING DORM-ROOM BILLIONAIRE LIVES ON
The shift to the smartphone made the difference. Decisions made in the early days of personal computing had given users an enormous amount of freedom: to collaborate, to produce, to share files without oversight. In the mobile era, those decisions were being reversed. Users were no longer producers who were to be empowered, they were consumers from whom value was to be extracted. The smartphone (or tablet) of today feels less like a collaborative tool for communication and more like a sales kiosk. Unlike the Wild West days of the web, today a few tech giants — Facebook, Google, and Apple — determine which apps are permitted, and which are not. And they want to keep the media companies happy.
Despite this profound change in the power structure of the internet, the legend of the rule-breaking dorm-room billionaire lives on. I wonder if it still has any basis in reality. It’s been almost 20 years since the first mp3s began circulating on college campuses; it’s been more than 10 since Mark Zuckerberg founded Facebook. Is it possible for the junior entrepreneur of today to do what Frankel (18), Fanning (18), Parker (19), and Zuckerberg (19) did? I doubt it. The rules are in place now; the upstart rebels are established players. There will still be young entrepreneurs of course, but they’ll have to settle for preapproved real estate in mobile computing’s digital mall. It’s time to retire the rule-breaker ethos. We don’t know why Greenberg died, but we do know why Grooveshark failed. There was no place for it in the modern world.
Hey guys, aura here. today i want you guys to take time to mourn the loss of grooveshark and how awesome it was.
R.i.p
grooveshark