The e-mail implies that their plan was to knowingly infringe for months/years before negotiating a license.

They could then use the data gained from (infringing) streaming/uploads as a bargaining chip while negotiating the license.

I think the email is ambiguously worded.

I read it as, "we license their songs, and then we license the usage data back to them at a higher rate once it reaches some threshold."

You apparently read it as, "we infringe until we have enough usage data, and then we negotiate a contract where they pay us."

The few ambiguous parts are,

1. Whether "we use the label’s songs" means to license or to infringe.

2. Whether "the data we got from them" is licensed or infringement.

3. Whether "what we pay them" means what they had paid in license fees up to that point, or the terms of the negotiated license.

You're missing:

  > we are achieving all this growth without paying
  > a dime to any of the labels

and

  > In our case, we use the label’s songs till
  > we get a 100 (million) uniques

Combined these statements make it less ambiguous.

I read "not paying a dime" as referring to their net with the labels

In their business plan, they take a loss for licensing up front, but eventually net positive by licensing the data back to the labels.

Contrast with, e.g., Spotify, who nets a loss with the labels.

if that were the case, why would they then say:

"Let’s keep this quite for as long as we can."

also,

> they take a loss for licensing up front

doesn't seem like the correct interpretation, because they say

"we are achieving all this growth without paying a dime to any of the labels"

That's exactly what he meant, they don't pay a dime because they offset it by selling data.

To me, the phrase "let's keep this quite [sic] as long as we can" implies you know you're doing something wrong.

No it doesn't. It implies that you don't want people to know about it. But there's plenty of things in business that are legal and ethical, but you still want to keep quiet. For example, Google kept their search revenue quiet for a long time and intentionally did so. Were they doing something wrong? I'm sure Apple would like to keep their supplier deals quiet.

If you're getting a good deal with competitive advantage, you often want to keep that quiet -- and it doesn't imply you're doing anything wrong. Now if they statement ended with, "or we could all up in jail" then that would imply they were doing something wrong. This just sounds like they found a sweet deal and wanted to make sure they could milk it with as little cost for as long as possible.

I don't know about that, but I guess we'll find out soon enough. I'd give them the benefit of the doubt since this is all on Universal's words, they provide an amazing service, have license agreements with EMI and lots of smaller labels.

Is there a list somewhere of all of the actual artists Grooveshark has legal agreements with? I'd love to see the percentage of streams of unlicensed artists vs. licensed artists and how much each contributes to their total stream output per month.

Grooveshark didn't start licensing anything from major labels until extremely recently. They built their userbase on unlicensed music.

Everything in the second paragraph is happening in the future. This isn't immediately clear, but it's a common enough writing style. Just pretend they wrote "we will use", "we will pay them", and "they will pay us".