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Digital
Playlist.com owes $25 million in royalties
By CMU Editorial | Published on Wednesday 25 August 2010
US streaming music site Playlist.com filed for bankruptcy protection earlier this month, according to CNET, because it owes the four major labels $25 million in unpaid licensing fees.
Originally an illegal site, Playlist.com managed to secure deals with all four majors last year. As previously reported, EMI, Warner and Universal sued the online service, formerly known as Project Playlist, in April 2008. EMI dropped its litigation a year later, though Warner and Universal continued a little longer.
Announcing its deal with the digital service in March last year, EMI Music Services man Ronn Werre told reporters: “Making our music available on a fan favourite like Project Playlist is part of EMI Music’s mission to connect artists and fans and to give fans more ways to discover new artists. Project Playlist is becoming a fan favourite. Our artists also know that word-of-mouth among friends is a powerful part of music discovery”.
However, after the site defaulted on payments due to the majors at the end of May, a number of those deals were reportedly withdrawn, though content from all four companies is currently still available on the site, meaning that Playlist.com is not only in debt but now operating semi-illegally again.
According to court documents seen by CNET, the company is trying to raise new financing, in part to cover its debts. However, unless it does something impressive with the rest of that new financing, it’s likely to find itself in trouble again not too far down the line. Which doesn’t make it an especially attractive investment opportunity.
