Grokster Radio will launch in late November in partnership with Mercora, Inc. of Sunnyvale, whose technology allows users to stream music from other computers on the Grokster network, but is claimed to block permanent downloads, thereby serving music fans searching for new music, as well as the recording industry that needs to sell it to them. As in the original Napster model, users can search for titles among other users' files. Mercora then monitors songs streamed and pays royalties to music publishing and recording rights organizations at the rates paid by Web radio stations, currently about $400 per month, a figure expected to rise to over $20,000 per month by the end of next year if all goes according to plan.
Exactly how revenue will be collected from Grokster users for this purpose wasn't made clear in various reports, although there were allusions to "advertising sales" and "future subscription fees," buzzwords familiar to anyone who lived through the dot-com boom. Pre-release hype included the statement that Grokster Radio would be "the world's largest radio network," in the words of Mercora co-founder Srivats Sampaths. Approximately eight million copies of Grokster software have been downloaded since its debut four years ago.
The move comes in the face of continuing opposition to file sharing by the entertainment industry. On November 10, a coalition of industry trade groups appealed to the US Supreme Court seeking a reversal of an August 19 ruling by a Federal appeals court in San Francisco that file-sharing software made by Grokster and StreamCast Networks, Inc. did not violate US copyright law.
That ruling sent a shockwave through the music industry, which responded with the November 10 petition to the Supreme Court to hear the case of MGM Studios, Inc., et al, v. Grokster, Ltd., et al.. Signers of the petition included the Recording Academy (also known as the Grammy Organization) and various member organizations, including the American Federation of Musicians (AFM), the American Federation of Television and Radio Artists (AFTRA), the Country Music Association (CMA), the Gospel Music Association (GMA), the Hip-Hop Summit Action Network, the Jazz Alliance International, and the Rhythm & Blues Foundation. Grokster and StreamCast Networks have filed a joint brief requesting that the Supreme Court let stand the Ninth Circuit Court of Appeals ruling.