Project Playlist Picks Up Total Music Leftovers From Universal, but Hasn’t Settled Lawsuit

Published on May 19, 2009
by Peter Kafka

The music industry’s online forays have always inspired head-scratching, but this one is odd even by those standards: Project Playlist, the online music service currently being sued by Warner Music Group (WMG) and Universal Music Group, is bolstering its tech staff by buying the assets of… a music service owned by Universal Music Group and Sony (SNE).

But the lawsuits have yet to be resolved.

Confusing? Of course.

Here’s Project Playlist’s description of the deal, which references layoffs at the company to eliminate redundancies with the new acquisition, but doesn’t specify how many folks are being let go. Given that Total Music only employed about 30 folks at its peak and was essentially shut down last winter, it’s hard to see how many Total Music employees are coming aboard–I’m guessing fewer than a dozen, and am trying to confirm.

We recently acquired assets and employees from TotalMusic LLC, a digital catalog management and reporting system. This acquisition is an important platform that will allow us to host a streaming music service, help us with e-commerce solutions and provide a set of application programming interfaces that will be invaluable to us as we offer next generation digital music services to our users.

Today we are integrating the assets of TotalMusic into our Playlist operation. As a result we have to address some overlap in certain areas and let some employees go both from Playlist and Total Music. This is no reflection on the talent of the people we had to release, rather a responsibility we have to run a lean organization with no redundancies and clear lines of reporting.  This often happens when two companies merge, but it is never easy.

On a positive note, we are very excited about the progress we are making. With the Total Music acquisition and our recent licensing agreements with Sony ATV and EMI Publishing, we are developing new features and services everyday that will form an even deeper bond with our 45 million loyal users and create new revenue opportunities for our company as well as our music content partners. More to come, watch this Space!!

Total Music, which Universal started in the fall of 2007 and shut down this February after joining up with Sony along the way, was supposed to be a subscription music service that got bundled in with devices or with ISPs/cable guys/telcos, etc. Given that it never, to my understanding, streamed a single song or collected a penny in revenue, it’s interesting to see that Project Playlist thinks there’s something there worth buying.

The bigger picture: It’s hard to see how this company can move forward until new CEO John Sykes, who replaced Owen Van Natta when he decamped to run MySpace for News Corp. (NWS), can clear up lawsuits with Universal and Warner and then get Facebook and MySpace to let it back onto their respective sites. The social services were crucial to Playlist since they generated the majority of its visitors, but they cut them off last fall, presumably under pressure from the labels.

Given that Van Natta is now running MySpace and that Playlist was at least able to negotiate an asset purchase from Universal, perhaps there’s a shot at getting all of that accomplished. Then the service could concentrate on the even tougher task of trying to make money in digital music.

Return to: Project Playlist Picks Up Total Music Leftovers From Universal, but Hasn’t Settled Lawsuit