Young Guns: Grooveshark, the "Jaws" of the Music Business?

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Young Guns: The

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Young Guns: The "Jaws" of the Music Industry?

Music startup Grooveshark has over 35 million users and a lot of critics –but just like sharks, it says they have to keep moving in order to survive

Gainesville, Florida is a college town--home of the Gators, the University of Florida’s well-known and beloved football team. A lesser known factoid is that it’s the hometown of legendary rocker Tom Petty. But who would have thought it would be the starting place for Grooveshark, one of the biggest music startups in the country right now.

Well, for starters, Sam Tarantino and Josh Greenberg--the co-founders of this much talked about music streaming service that allows you to search, upload and listen to any song.

“I had so many people say you’re in Gainesville, you’re not in the Valley—you can’t do anything there,” explained Tarantino. “There are no developers, there are no smart people. It’s Gainesville, what the heck do you think you’re going to do there?”

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“It’s unfortunate because in the past there have been legitimately bad players in the space that have muddied the waters...."

- Sam Tarantino, Grooveshark CEO

Tarantino, along with Grooveshark’s 100 employees, have certainly proved the naysayers wrong. The company, which has an average of 35 million users and streams over 155 million songs a month, is doing just fine in the Sunshine State.

“The easiest analogy to draw is we do for audio what You Tube does for video,” said Greenberg.


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    Its current revenue model is based on subscriptions and advertising but Tarantino and Greenberg--25 and 24, respectively--say their future plan is to work with record labels to develop new artists they find on Grooveshark. And while they say they’re currently in partnerships with hundreds of labels, not everyone is a fan.

    As of today, it is reportedly being sued over licensing issues by some of the biggest names in the industry – including Warner Bros., Sony

    “We have to show that were not out to be Napster and Limewire and all those pirate services. We are really trying to build value for artists, for labels and at the end of the day, it does come down to showing that we’re about increasing their profits and helping them generate revenue and cut costs,” said Greenberg.

    Tarantino agreed.

    “We need to educate people,” he said. “It’s unfortunate because in the past there have been legitimately bad players in the space that have muddied the waters and people just think, ‘They're only 25-years-old, let’s just forget them’ but we really are trying to help build up this industry.”

    The determination and excitement of these co-founders seems infectious--and you could see it on the smiling faces of their employees at the company’s weekly Friday meeting.

    As a fun aside, Tarantino showed them all a humorous YouTube video that showcased the popularity--and criticisms--of Denver Broncos quarterback and phenomenon Tim Tebow (who had previously played at the University of Florida).

    “They all tell Tebow he cannot keep winning, and six games later, he still is. I feel like that’s our story,” said Tarantino, as the room erupted in applause.

    “Everybody tells us we can’t do it, everybody puts us down, and again and again and again, we keep coming back and we keep growing…. And everyone knows the Tebow story, nobody knows ours yet. But it will be told."

    Six Shooter Q&A with Sam Tarantino and Josh Greenberg

    1. What is your favorite quote and why?

    Tarantino:

    This is the fundamental essence of business and life. Great things happen and bad things happen, the worst scenario can and will be a reality and the best you can do is never give up because business and life are cyclical. Impossible odds can be beaten but only with this attitude.

    Greenberg:

    I love that quote because it has helped me get through periods of complexity and ambiguity in both business and my personal life.  Many times I've found myself facing a daunting task that seemed so large it appeared to be insurmountable -- it's helpful for me to remember that every such task is really a series of tiny steps meant to be taken one at a time.

    2. How is Grooveshark different than all the other music-listening sites?

    Tarantino:

    Greenberg:

    3. Why will Grooveshark succeed?

    Tarantino:

    Greenberg:

    4. Why will you succeed?

    Tarantino:

    Greenberg:

    5. Who is your biggest source of inspiration?

    Tarantino: Winston ChurchillWWIISteve Jobs

    Greenberg:

    6. What does Josh bring to the table and how do you think you complement one another?

    Tarantino:

    What does Sam bring to the table and how do you think you complement one another?

    Greenberg:

    Recommend an entrepreneur you think we should cover by e-mailing us at youngguns@foxbusiness.com

What do you think?