Tech Crunch is reporting what’s left of digital music wholesale service Snocap has been sold to the Web 2.0 social music service Imeem. A formal announcement, they report, is coming later in the week.(UPDATE: It took months not weeks for an official announcement but as of April 7, 2008, the news is now official. See the bottom of the article for updated terms)
Snocap, which aimed to be a licensing conduit for music, has been diseased and for sale for some time. Despite deals with MySpace and other vendors, they were a casualty of the DRM Wars; never able to grab much marketshare. Rumors have consistently put them one foot from the dead pool for months.
In September, much of the staff was laid off. Founder Shawn Fanning is thought to have largely moved on to his new startup, Rupture, a social network focused on multiplayer games (MMORPG) like Activision/Blizzard’s World of Warcraft franchise.
Snocap’s CEO Rusty Rueff acknowledged a sale was necessary in September. He told CNET: "it took a lot of work and a lot of capital to bring this capability to market. But it’s that time when we are asking ourselves what’s next. And we think it’s probably best for us to be part of a larger entity.” The layoffs implemented at the time were part of an effort to lure buyers and cut back burn rate to insure they could survive until a sale.
No details on the iMeem deal have leaked outside of the Tech Crunch report. With one startup buying another, it’s a pretty safe guess that it is an equity deal and not for cash. It will give investors including Morgenthaler Ventures and Walden something more than a total write down of their prior outlay.
About imeem: Imeem is a free social networking service built around streaming digital music. Unlike most music sites which build a library of content to then offer to their users, imeem works partly in the reverse. Subscribers can upload music which is, in turn, added to the catalog. As a member of the site, you can create playlists, upload music, or listen to streams of music already in the catalog. Members can also use embeddable code to add the stream of a chosen song to a blog posting or a personal webpage (including profiles on some social networks). All four of the Big 4 music labels have signed deals with the company.
UPDATE: (APRIL 7,2008)
The early word called for an official announcement within a week, two at the most. It took longer but the deal is now official. As of April 7th, iMeem has issued a press release announcing the deal. Official terms were not disclosed but as part of the deal SNOCAP’s chief operating officer, Ali Aydar, will join imeem as its vice president of operations.
•Big 4 Music Labels back iMeem
•Snocap Dying: Layoffs for Many
•DRM and the Shrinking List of Music Retailers
•iMeem buys Anywhere.FM
•Snocap Deals with EMI
•Lawsuit Settled, Now Free Streams Flow from Warner and iMeem