Turntable.fm, the social music service that enraptured hundreds of thousands of fans in 2011 when it came out, has switched off a feature that allowed its users to upload songs in a move to cut costs and "keep the service running." The company also announced it will shut down its fledgling social radio service, Piki, launched in December, in order to focus on its core online social DJ service. 

The move highlights the difficulties for music startups, especially ones that rely on potentially costly licenses, to succeed.

Billy Chasen, who founded Turntable.fm, informed users on its blog earlier this week that they would need to pull in SoundCloud tracks in order to play songs, piggybacking off of SoundCloud's licenses to keep the music spinning. The move saves Turntable $20,000 a month, he said.

"It was a choice we had to make to keep the service running," Chasen said in his frank, if stark, assessment of Turntable's prospects.

It wasn't the first time Turntable had to curb its ambitions to avoid heavy royalty fees. A few months after it launched, Turntable abruptly banned users outside of the U.S. "due to licensing constraints," the company told users at the time. Chasen, who had tried to operate without label or publisher licenses under the Fair Use doctrine under the Digital Millennium Copyright Act, eventually caved in and negotiated licenses with all major labels.

But that route, Chasen wrote, "has been very expensive."

"We spend tens of thousands of dollars a month in royalties, service fees, hosting, etc." he said. "We could have removed a ton of that cost by just simply using YouTube or another service, but we felt it would dramatically reduce the ease of use and user experience. So that leaves us in a tough place."

Many recent music startups have pursued similar tactics, plugging into SoundCloud, Spotify, Rdio or YouTube to circumvent the music industry's notoriously Byzantine copyrights structure.