The threats of lawsuits by major labels has had a "chilling effect" on investment in the digital music space, according to a number of panelists on the "Show Us The Money: Venture Capitalists and Private Equity Experts Talk Strategy and Digital Dealmaking" panel at Billboard's Music & Money Symposium.
Andrew Lispher, a partner at Greycroft LLC, said that his firm will not invest in a start-up that might have a potential rights problem or might be the target of suits by the "big four" record labels. Other members of the panel pointed out that it might be beneficial for both labels and start-ups to approach their relationship as a meeting of the minds, and create incentives for each party to cooperate.
Panelists also discussed the CBS acquisition of Last FM, which all agreed was over-priced. Greg Scholl of the Orchard pointed out that companies like Google have yet to launch music services because the returns simply wouldn't be high enough for a company of their stature.
Also discussed was the emergence of MySpace and Facebook as marketing platforms for music, despite the fact that Snocap has failed to make a splash and drive users to purchase content from social networking sites.