8 Spectacularly Over-Hyped Music Startups

 8/26/10 Digital Music News

 If only hype could build a sustainable business model. Here are 8 of the most spectacularly over-hyped music startups that ultimately crashed-and-burned.

 (1) Spiralfrog (2007-2009) The ad-supported messiah never turned into a prince, despite searing levels of adulation. And, searing levels of cash-burn: at the time of death, estimates of squandered financing and debt approached $50 million.

(2) Imeem (2003-2009) Groundbreaking in many ways, Imeem was also struggling under back-breaking major label licensing deals. WMG was one sorry licensor and stakeholder; MySpace ultimately purchased the company for well under $1 million. Total funding reportedly approached $25 million.

(3) BurnLounge (2004-2007) Sort of like Amway for paid downloads, but no one bought the toilet paper. An FTC pyramid scheme investigation seemed like a bad sign – especially for investors like Justin Timberlake and Shaq, part of a group that plowed a rumored $40 million into this pyre.

(4) DataPlay (1999-2002) Just like a CD, but much, much smaller. The DRM-heavy DataPlay discs required entirely new players, and ultimately, a smaller trash can. But, not after some positively ginormous investments topping $120 million from the likes of Eastman Kodak and Intel.

(5) SACD, DVD-A, DualDisc Formats (1999-?) Still known by some audiophile fanatics and format historians, these glorified CDs were set to spark another disc boom. The Wall sold more than 800,000 SACD copies, though Pink Floyd could probably sell that many wax cylinders as well.

(6) Seeqpod (2005-2009) Playable search is still a great concept, but majors failed to see the magic. Microsoft was apparently interested in buying the distressed company; a deal never materialized.

 (7) Odeo (2005-2010) Part of a bigger podcasting explosion that never quite ignited, Odeo was actually co-founded by budding Twitterer Evan Williams. The site was sold in 2007, and mysteriously went dark this month.

(8) Project Playlist… Perhaps a premature death warrant, though a $28 million-plus bankruptcy is rarely a sign of life – especially in this environment. Though of course, stranger things have happened…



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