P2P Music Sharing Service Grooveshark Ups Compensation

grooveshark.jpgP2P music sharing and sales service Grooveshark has raised their level of compensation for sharing music from 10 cents to 25 cents a track, their entire profit on each sale.

Grooveshark is an interesting service that we’ve not covered previously, but has been reviewed by CrunchGear. Users upload their music to Grooveshark, and any member can listen to those tracks for free. If they want to download a song, they can purchase it DRM free and the user who uploaded the song gets a cut of the sale; previously this was 10c and now its 25c. The remainer of the 99c sale goes to the record companies; the service is legal and Grooveshark has agreements with the record companies to provide the service and to cover copyright obligations.

James Davis, VP of Communcations for Grooveshark told TechCrunch that the new deal was about gaining exposure for the service: “We are so confident that we have a good product that people will enjoy using, that we are willing to give away our entire profit margin to prove it.”

In a sales related special, Grooveshark will be covering the Copyright portion of every song download from noon to midnight this Friday (PST). All music on Grooveshark will be sold for 29 cents for the 12 hour period, a good offer considering that Groveshark has 3.5 million songs in its catalog.