When You’re Going Through Hell, Keep On Going

With all the doom and gloom of the past few months and all signs pointing to hard times ahead, I’ve been thinking back to earlier in the decade, during the dotcom bust. I was at Live365, the Internet radio network, and we had burned through millions of dollars with no appreciable revenues nor a business model. Our CEO/founder had left, and I found myself promoted to the management team well short of my 30th birthday and with no management experience to speak of. Our investors, having lost faith in the prior management team, had the Company on a very tight leash.  So tight that we depended on a wire transfer every two weeks to meet payroll and other obligations. Read More about When You’re Going Through Hell, Keep On Going

Face the Music: It’s Time To Fix Licensing

I was talking to an executive at a major label the other day. We were talking about startups and he noted that they either sue these companies out of business or legitimize them out of business. That is not far from the truth. How many legitimate, standalone digital businesses can you name that rely on licenses from the labels for their primary business and are profitable? Let’s categorize by business model:

E-Commerce/Transaction-based: iTunes immediately comes to mind. It may be profitable on its own, but we all know that Apple’s main business is to sell iPods and now iPhones. eMusic is the other one, and I think it has a real business on its hands — of course the vast majority of its repertoire is non-major label.

Music Subscriptions: This segment is dominated by Rhapsody and Napster. Neither is solely a music subscription service, but that’s what both are best known for. At any rate, neither is profitable. RealNetworks’ music business lost $1.9 M in the second quarter of this year. Napster? Well its stock chart kinda says it all; it’s currently trading for a little less than the cash it has on its books. Read More about Face the Music: It’s Time To Fix Licensing