It’s said about 60 percent of restaurants fail within their first three years. Music companies might not do much better.
In 2015, a number of music subscription services, Internet radio services, illegal music sites and a ballyhooed record label either retired or were rebranded. Some were well-known names. Only the most avid watchers of digital music or startups knew some of them. All of them were created to help bring music to people in new ways.
Thousands of entrepreneurs have attempted to solve various problems in today’s music business. Some of them create tools that help artists and businesses work smarter and more efficiently. Many other entrepreneurs try to help consumers find and access music. Every company on this list took the latter approach. These were business-to-consumer companies that played in a noisy, competitive marketplace filled with other attempts to bring music to consumers in novel ways.
The trick in launching a business is to attack the right problem at the right time, with the right product and with the right resources. Some will succeed and prosper as standalone businesses. Others will succeed and be acquired. The rest will die, either gracefully or ignominiously. Here are some that departed us in 2015.
Sued and seized
There may be no music service sued out of existence faster than Aurous. Founder Andrew Sampson claimed the service was legal because it had only links to music, from YouTube and Soundcloud and many other third parties, not the music itself. He said he would ignore any cease and desist letter. “It’s not like we’re stealing music,” he told Billboard. There was one problem: Aurous was operating from the United States, not from some out-of-reach place like Estonia or Belarus. The RIAA sued just three days after the service’s launch. Fewer than two months had passed before Aurous shut down and the major labels took control of its intellectual property.
Shuttered, brand retired
Apple acquired Beats Music (by way of its $3 billion purchase of Beats Electronics) in May 2014 and, after some retooling, launched Apple Music 13 months later. Suddenly a redundancy, Beats Music was shut down on November 30. The stars seemed aligned for Beats Music. Dr. Dre and Jimmy Iovine built it, Trent Reznor was the creative director. A small army of music-obsessive editors and their human toiling raged against algorithms. But it didn’t matter that Beats Music failed to resonate with consumers. The task of finding subscribers has been left to Apple.
As founder Judah Himango explained in a blog post, BitShuva Radio started as a way to stream Messianic Jewish music that wasn’t being played elsewhere. Himango went on to build custom radio stations for clients that streamed everything from West African soul to Egyptian Coptic chants. But after two years of working on BitShuva in his spare time and making little money, Himango decided to shutter the company and transfer the stations to his clients’ servers.
A 2013 graduate of the Y Combinator startup accelerator, Bop.fm wanted to connect music streaming’s many unattached threads. The goal was to unite different services by streaming ad-supported music from Soundcloud and YouTube as well as subscription music from Spotify, Deezer, Rdio and Beats Music. It was a platform for platforms, an aggregation service that could find a song on most any platform and stream from the Bop.fm app (Billboard took advantage of that). Not that searching and streaming are seamless activities, but Bop.fm might have overestimated the degree of the problem. Consumers might simply be content with their service of choice. The service announced in October it had been acquired online security service Lifelock and would be shut down.
Music sharing is a tough business model. People are content to share music on their favorite social media services, email and blogs. BOOMiO attempted to become a sharing platform unto itself, letting users send a full-length, fully licensed song with a personal message. But BOOMiO never became the Instagram of music. It shut down in November, just 13 months after its debut at Re/code’s Code/Mobile conference, although the company suggested a retooled BOOMiO could return in the future.
Sued and seized
Grooveshark was notorious for operating in a gray area. The Gainesville, Florida-based streaming service had a few licensing deals, mostly with independent labels, and claimed protection under the Digital Millennium Copyright Act for everything else. Finally succumbing to an infringement lawsuit brought by Universal Music Group, and facing $420 million in penalties, Grooveshark shut down, issued a forced apology, wiped its servers of record companies’ music and surrendered ownership of its website, mobile apps and intellectual property.
I.R.S. Records was reborn in Nashville in conjunction with un-Nashville-like Caroline Music Group in 2013. It released music that mainstream country labels wouldn’t touch. There was an album by country duo Striking Matches with just enough Americana flavor to make country radio promotion difficult. Another release was a posthumous album by Cowboy Jack Clement, the famed songwriter and producer whose credits ranged from Johnny Cash to Townes Van Zandt. The gamble didn’t pay off, however. I.R.S. Nashville closed down in December, its artists to be absorbed by Capitol Music Group.
Sometimes a good product in a growing market isn’t enough. Mad Genius, founded in 2012 and shut town in August, was an Internet radio app that gave listeners the ability to fine-tune channels according to their musical preferences. Two facets might have caused problems: the app was only available for iPad, greatly reducing the amount of out-of-home listening; in addition, Mad Genius opted for a pay-only model, rather than a free or freemium approach. But it may have been most impacted by competition. Founder Eric Neumann told RAIN News the company needed “substantial marketing dollars” to rise above the noise.
Founded by the creators of Skype, Rdio was the first major subscription service to go bankrupt. It was lauded for its sleek designm, but overshadowed by competitors and losing $2 million a month, with $220 million in debt. It shut down December 23. While the brand may be gone but Rdio’s spirit will live on. Pandora swept in and bought some assets and will bring aboard about 100 Rdio employees to help build its on-demand service expected by the end of the year.
In September, visitors to Sharebeast.com and sister site Albumjams.com saw not a list of music available for download, but a notice that the website had been seized. The RIAA said the sites operated “with flagrant disregard for the rights of artists and labels while undermining the legal marketplace.” Since June 2011, Google received nearly 37,000 requests to remove over 275,000 Sharebeast URLs from its search results, according to Google Transparency Report. Amazingly, that’s actually a small number compared to, say, the 8.1 million URL requests for Polish file-hosting site Chomikuj in just the last 12 months.
Songza isn’t exactly gone. Acquired by Google in 2014 , the non-interactive radio service’s novel approach to choosing music had already been integrated into Google Play Music. Songza is what lets listeners choose an indie acoustic chill playlist for waking up in the morning, or a high-energy dance playlist perfect for working out. But being acquired often means being consumed by the acquirer. A year-and-a-half after the purchase, the Songza website and mobile apps were shut down.
Music sharing and discovery app Soundtracking had a dual mission after its developer, Schematic Labs, was acquired by subscription service Rhapsody in August of 2014. Soundtracking, a sort of Instagram for music, would add new features to take advantage of Rhapsody’s 30 million song catalog while bolstering Rhapsody’s discovery features. Explaining it was “focus on Rhapsody as a single platform,” Soundtracking was abruptly shut down 11 months later.
Tapely seemed like the best of both worlds. It let people create playlists, with songs ingested from Soundcloud and YouTube, that were then turned into mixtapes, with the addition of a title and artwork. But the mixtape concept may have been too nostalgia-driven for today’s consumer. In any case, Tapely probably faced a long slog. Services that pull music from ad-supported third parties inevitably face problems (see Music Messenger). Continuing to operate might have required that Tapely secure on-demand licenses from record labels — and that often doesn’t work out well.
Tidal, the music subscription service launched by Jay Z, started out as WiMP, a Scandinavian music service with about 500,000 customers operated by Aspiro AB. It had launched in the United States under the name Tidal just months before Jay Z bought Aspiro in January. Tidal had a roller coaster of a year: an embarrassing launch event, executive turnover and, in December, the announcement of veteran digital music executive Jeff Toig as its new Chief Executive.
Microsoft’s rebranding of its music service in July seemed to have been missed by most of the music industry. In case you missed it, the new service is called Groove. It replaces Xbox Music, which replaced Zune in 2012. More attention was given to the news the Zune brand would be retired by year’s end. Launched in 2006, Zune was a digital music player — Microsoft’s version of Apple’s iPod — that could be paired with the Zune Music Pass subscription service. The notion of putting a subscription service into a mobile device was ahead of its time. It was also destined for trouble. The iPhone and other smartphones would later give consumers the freedom to pair a subscription service of choice with their device of choice.