Controversial streaming music service Grooveshark has shut down, as part of a settlement with major labels following its most recent legal defeat.

“We have agreed to cease operations immediately, wipe clean all of the record companies’ copyrighted works and hand over ownership of this website, our mobile apps and intellectual property, including our patents and copyrights,” its founders explained in a note posted on their site.

This being a court settlement, there is no sniping at rightsholders as we’ve seen from some other startups shutting down of their own accord. The opposite, in fact.

“We started out nearly ten years ago with the goal of helping fans share and discover music. But despite best of intentions, we made very serious mistakes. We failed to secure licenses from rights holders for the vast amount of music on the service. That was wrong. We apologise. Without reservation.”

The note suggests that people try licensed services including Spotify, Deezer, Google Play, Beats Music, Rhapsody and Rdio as an alternative.

In truth, a large part of Grooveshark’s audience – the ones that found music on the service through online searches – will by default be finding those songs elsewhere now. Amid its legal woes of recent years, Grooveshark was not able to innovate in features at the same pace as some of those licensed rivals, hampering its attempts to build a loyal listener base.

Is there any value in the Grooveshark brand or those apps and IP for labels? We suspect not – even the $0.99-a-month Broadcasts app that was due to launch in January as a Pandora-meets-WhatsApp hybrid of licensed streams and messaging. Perhaps it will resurface under a new name.

It’s true that the shutdown will be celebrated by music rightsholders who’ve long seen Grooveshark as a bad actor having a negative impact on licensed rivals’ efforts to build their businesses.

Even so, in the longer term its closure is less significant than figuring out how free licensed services – from Spotify’s basic tier to YouTube and SoundCloud – can play the healthiest possible role in the future for musicians and their industry.

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