Streaming music site Playlist.com has been forced to take down its service following legal threats. The site, which has been around in various forms since 2006, made some surprise major changes to its offering on July 1st. Following a user backlash, the site admitted a few hours ago that the "brutal" switch to a radio station-based service was due to the major record labels threatening to sue.

Playlist (previously known as Project Playlist) was born back in 2006 with the aim of bringing music to growing social networking platforms such as MySpace.

From humble beginnings the site grew its membership to more than 20 million in 2008 but problems lay ahead.

During the same year the company was sued by the RIAA for “reproducing plaintiffs’ valuable works (and inducing and enabling others to do so) without any authorization whatsoever, without paying any compensation whatsoever.”

Project Playlist (PP) protested, claiming that they didn’t host any music and merely pointed users’ playlists to content hosted on third-party websites. PP came to an agreement with one label, Sony, but disputes with the other labels remained.

In another blow, later in 2008 both Facebook and MySpace removed Project Playlist’s widgets from their sites.

Following an agreement in 2009 which saw EMI’s music come to PP, in May 2010 the company settled with Universal and Warner. At this time, Project Playlist had more than 42 million users.

However, things were going downhill. A messy bankruptcy and dispute over royalties later that year continued to take their toll. Having been renamed to just ‘Playlist’ the site moved on but with traffic declining significantly since 2011, just a few days ago the service suffered its biggest setback yet.

How things used to be

“We’re launching the new Playlist smart radio service today!” the company announced July 1.

“We know you put a lot of effort into creating 80 million playlists at Playlist.com. So we’ve built radio stations out of all 80 million…whoa, that’s a lot of stations.”

Even though the changes were advertised as something positive, the scale back of service prompted a backlash.

“The new Playlist is TERRIBLE!!” screamed one user on Facebook. “I liked [the original] because I could listen to what I wanted when I wanted. I could search a song and it would be right there. Now, it has a dumb radio. YouTube is better than this now!”

On July 6 the site’s operators reported they were “psyched” by feedback on the changes, but comments from the site’s users suggested all was not well.

“So all these complaints, and you still think this is a good idea,” one complained. “Wow, I’m at loss for words for how idiotic your website is. I really doubt you can compete with Pandora or Spotify. When will you learn that we want to listen to our music, not music that closely matches it?”

Now a much clearer picture is emerging. Playlist.com has just revealed that the changes were forced upon them due to problems with the labels.

“The bottom line is the licensing gods were not smiling on us (aka we would have been sued) and we had to make a change,” the company admits.

“We didn’t want to air our dirty laundry but…the record labels required us to shut down the original Playlist service. We’re so sorry; it was our life for over 6 years.”

Playlist.com says that user playlist information is safe and will now be used to play recommendations within a “smart radio” format, noting that the company is now being “forced to play by Internet radio rules.”

TorrentFreak reached out to Playlist and the RIAA for comment and will update this article when we receive a response.