Grooveshark’s loss is Spotify’s gain

GroovifyComparisonGrooveshark and Spotify both began in 2006 as web-based music streaming services. As the two companies grew, one company received the blessings of the major music labels (or rather licensed the blessings) while the other company ignored the major labels, focusing instead on deals with smaller labels. Guess which company recently shut down permanently at the behest of said major music labels?

Grooveshark shut down forever on May 1st, 2015, a move that shocked no one who had followed the company’s tenuous legal status over the past half decade.  While both services started out with strong growth (as seen in the graph above), their trajectories after 2011 could not contrast more starkly. In July 2011 Spotify launched in the US market to great success. In November of 2011 Universal Music Group sued Grooveshark for 15 billion dollars, effectively marking the beginning of the end.

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With the loss of their music on May 1st, Grooveshark users began searching for an alternative. I for one immediately switched to Spotify, which is what prompted me to do a Google trends keyword analysis of the two companies over the past month. As you can tell, there is a huge spike for both keywords in relative search interest on the the day Grooveshark shut down. I’m no financial expert but I suspect Spotify’s revenue will see an unanticipated bump up in this last quarter of the fiscal year.

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