by Mike Masnick
Wed, Oct 14th 2009 9:50pm
We've noticed a troubling trend in how legitimate online music services are being pressured into deals with the major record labels. The labels begin the negotiations on licenses... and then sue the company. That, of course, makes life difficult for the startup, which is then pressured to offer even better (read: ridiculously onerous) terms to the labels. We've seen it happen over and over again, and saw it happening when EMI sued Grooveshark this past summer. And, of course, a few months later, the lawsuit is dropped and a licensing deal has been reached, though you can bet the terms are not quite what Grooveshark originally intended. That's what happens when part of the "negotiation" involves a lawsuit.
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