So Just Got Its Label Licenses. R.I.P.

But wait: isn’t already over?

That’s a debate, though this isn’t: Turntable had a lot more buzz, traffic, and interest last summer, and they also didn’t have major label licensing overhead.   Since that point, traffic to the site has plunged to a fraction of its peak, and right now, it’s unclear if there’s a rebound in sight.

No matter: at SXSW, cofounders Billy Chasen and Seth Goldstein announced a successful licensing round involving all four majors: EMI, UMG, WMG, and Sony Music.  That means their gray-area gamification approach has been validated (or at least paid for), and more license-dependent expansion ideas are now possible.

So hand it to the majors: they decided not to bury this, but in reality, they’re probably charging handsomely for the privilege of a lawsuit-free existence.  Which means now enters its own, privately-licensed hell of bigger overhead and constant renewal pressure.  The specifics of these deals are private, though may have also been forced to give ownership shares to each and every licensed label (it’s now a common negotiation demand).

Which is exactly the reason that VCs frequently run from these license-contingent models (Turntable scored $7.5 million in a round led by Union Square Ventures, and the company has been valued at roughly $37.5 million).  At SXSW, Goldstein said he doesn’t want to do traditional advertising, but he may be under considerable pressure to feed a radically-changed overhead.  Which cramps his ability to spend on expansion, develop longer-term research ideas, and hire talented developers.

All of which means that rebounding with licensing might be harder than rebounding without licensing.  It’s a scenario we keep seeing, over and over again.

/paul, at SXSW.

7 Responses

  1. Anthony

    Like most stuff these days, OVERHYPED…

    How did some “experts” think the masses would bite?

    I’m not hating, it’s a cool idea and that’s ABOUT it.

  2. Tom

    It closed access from outside the US around the time it dropped. Now it looks fairly consistant. Dead already? That seems unfair.

  3. @dubber

    The latest victim of the major labels’ protection racket for music startups.

  4. @kellyransford

    So gets its label licenses but seriously, does anyone use?

  5. @playlist_pro suffers from having never done this before, and their unwillingness to listen to people that have. And bad public speakers. Enough hate tho, I like it some, and hope they can pull it together. I have discovered some good music there.