Digital Music News has confirmed that Passalong Networks is now winding down and looking to sell its various business units. The shutdown process already involves the departures of several top executives, including SVP of Corporate Development Skip Franklin and Founder & CEO Dave Jaworski. According to sources close to the situation, Passalong properties Speakerheart, OnTour, and StoreBlocks are all being positioned for sale.
Passalong Networks was a heavily-financed company, one that had already burned through $40 million by the tail end of last year. That figure, shared by Jaworski in December to Venture Nashville Connections, was a combination of equity and debt financing. The company was seeking an additional, $30 million infusion, an extreme hurdle in a bone-dry financing world. A portion of the newer round was being earmarked to pay down older debt, according to Jaworski.
The shutdown of Passalong Networks is hardly unexpected in the current climate. The digital music model is a very difficult puzzle to solve and Passalong Network was seeking additional financing in a bone-dry financing world. Unfortunately, it seems that the company was unable to secure the additional funding it needed to continue.
Other properties, including charitable initiative (RED)Wire, will not be sold. Outside of that, near-term shutdown and liquidation details remain unclear, and sources were unable to outline a time window for the process. The company operates just outside of Nashville.
In a discussion on Monday evening, Dave Jaworski declined to offer concrete details related to the wind-down, though the executive is clearly exiting the company and forging future plans. “I’m passionate about digital media, and have significant interest and plans in the space,” Jaworski offered.
Skip Franklin was also open to discussion, though Digital Music News could not connect ahead of press time. But Franklin offered a departure note on his Facebook account. “The primary thing I’ve learned is that the digital music model is a very difficult puzzle to solve and that we’re still a decade away from fully solving it,” Franklin stated. “Farewell for now. I’m off to fight another fight!!”
The shutdown of Passalong Networks is a stark reminder of how difficult it can be for companies trying to succeed in the digital music industry. While the industry has undergone significant changes in the past decade, the challenges that companies face remain the same. The quest for profitability and sustainability is a difficult one, and companies must navigate a rapidly evolving landscape to succeed.
Despite the challenges, there are still many companies in the digital music industry that are thriving. Companies such as Spotify and Apple Music have built successful businesses that have transformed the way people listen to music. However, for every success story, there are countless others that have struggled to succeed.
The shutdown of Passalong Networks serves as a reminder that the digital music industry is not for the faint of heart. Companies must be able to navigate an ever-changing landscape and overcome significant obstacles to succeed. While the future of the industry remains uncertain, it is clear that only the strongest and most resilient companies will survive.