Digital music wholesaler Snocap, long searching for a buyer, is being acquired by music streaming site Imeem. The price will likely not be disclosed.
Snocap was founded in 2002 by Napster creator Shawn Fanning, Jordan Mendelson and Ron Conway. The company raised $10 million from Conway, Morgenthaler Ventures and WaldenVC and did high profile distibution deals with MySpace and others, but the business failed to scale (since people don’t really pay for music any more). Last year they also partnered with Imeem, who may see an acquisition as a better end result than Snocap simply shutting down. Imeem uses Snocap’s digital fingerprinting technology to track how many times any particular song is streamed on its site so that it can allocate a portion of its advertising dollars to the major music labels. Without Snocap’s technology, Imeem would have to find a replacement quickly, or find a new business model.
The deal is just being closed this week, we hear from a source. It’s a good outcome for Snocap, which has gone through significant layoffs and was on deadpool watch.
This is the second acquisition for Imeem in as many months – in January they acquired Anywhere.FM. Imeem has raised two rounds of capital, although the size of the second round was not disclosed.
Fanning, meanwhile, has largely moved on to his new startup, Rupture.
One question: where is iMeem getting all this money for acquisitions?
What is strange, Imeem was kicked off Myspace, Snocap has a huge deal with Myspace. So it imeem suddenly back in the good graces of FIM?
imeem trying to parlay itself of as a legitimate itunes competitor
Price? Did Snocap pay its investors back?
well, this isn’t a surprise!
imeem uses snocap to power its service. since snocap never told them that they were about to go belly under, imeem could not prepare for alternatives to snocap’s bad technology for fingerprinting songs.
i bet u though that the price wasn’t enough to pay the investors back. no company in their right mind, esp. a startup, would buy snocap for $30+ mil that they raised.
and hey michael, u engaging in ip filtering on my comments huh?
has anybody else – who sometimes admonishses TC or tells the truth about their bad reporting – seen their comments not appear as well?
nice journalism, Michael. filter the comments of those who disagree with you.
forJustin – If your comment is appearing on the site, which it is, it is by definition not being filtered. If you were being filtered, your comments wouldn’t appear.
however…we delete lots and lots of comments. you’d be amazed and the number of wingnuts that show up here and think it’s their own personal soap box. be interesting or go start your own blog.
“since people don’t really pay for music any more”
The hell they don’t! C’mon, man. That statement is broad and accusatory. Are you just trying to stir things up? Maybe lay a guilt trip on a few readers who still download illegally? Or do you really, truly believe things (and people ) are still like they were back in the Napster days?
#8 – yes I truly believe that, and yes I am stirring things up.
The only reason this happened is because Ali Aydar, COO of SNOCAP is on the board of iMeem. Very lucky strategic alliance for them – not sure anybody else was interested…
This company was doomed from the start completely due by poor management. For example, the initial CEO was dismissed after less than 9 months – I should know, I was there.
“(since people don’t really pay for music any more)” = the truth.
michael,
you technological dumbnut. i said ip filtering. read carefully!
i had to remote connect into a server in another location for my comment to show up.
and to imagine u report on technological companies.
and finally if u don’t have the balls to take comments, don’t start a blog.
forjustin – well, i don’t see any comments in moderation, so if you wrote something and it didn’t show up, akismet thinks it was spam. which it probably was.
and in response to your challenge – if you think you’re so awesome, try leaving a comment with a real name.
random attacks aren’t very interesting.
Good for them (both). Would have been sad to see Snocap technology go to deadpool. They seemed to have been doing cool stuff, but did not execute on generating revenue too good (why does this remind me of Y!
)
What about Boomshuffle.com? Were’n't they the reincarnate of Snocap? Are they part of the deal?
i can only imagine snocap investors lost their shirts big time. because it’s not impossible to change a backend to support audible magic, gracenote, etc. – how much of a premium would imeem really pay?
snocap was a failed model from the beginning. legitimize p2p? that means you are on a level playing field with itunes dude. and you’re gonna have to go out the gate with encrpted wma (at least before the labels switched to mp3). these p2p services for the most part, suck aside from the fact that the music was free. take that away and you have a team in place and a product that can no way compete with the incumbent for digital sales with a snocap powered system. snocap did an admiral job trying to change the model when the writing was on the wall that drm to compete with itunes was a dead in the water business. but a day late and a dollar short i guess.
this was investors buying into a brand name (shawn fanning) with little knowledge of the minefields in the space.
Snocap had poor execution, check out http://www.soundloud.com. These guys make snocap look like snocrap.
snocap was founded by ex napster employees
imeem was founded by ex-napster employees
So the big question for the bloggers is: does this acquisition mean that imeem is becoming the new-old-napster, or is it still the ‘youtube of music’?
is Imeem already making this much money so that they can afford these acquisitions? And if not, how can investors trust this much in Imeem to spend big amount of money for new acquisitions?
David Hyman has some good points.
Snocap’s attempts to enable legal p2p were misguided.
The truth is users didn’t care about p2p, all they cared about was sharing music, which is exactly what imeem is all about.
In a roundabout fashion snocap has played its part in resurrecting all the great things about the original napster, it doesn’t matter that it’s not a p2p network, or that it’s all web based, imeem has all the key elements of what made napster 1.0 great. And snocap is sitting in there somewhere checking every user’s upload for licensed and blocked content.
I think there’s a bit of oversimplication going on what wit the generous dose of hindsight. “Legal P2P” does NOT best describe the crux of SNOCAP’s killer app, which was essentially widgitizing a digital storefront for emerging indie artists. It was a turn-key registry and storefront solution that made sense for a whole lot of DIY artists. SNOCAP certainly wasn’t lacking in content, at least amongst the bubbling indie artist just below mainstream distribution, which in this digital media era encompasses a significant portion of music that is consumed in this country. But I agree in that, no matter how turn-key this solution was for both artists and PAYING consumers, nothing beats free and easy music.
Furthermore, the all-in-one digital registry and fingerprinting service mean SNOCAP had a very attractive B2B platform in the future era of ad-supported music (hello imeem?).
In other words, SNOCAP wasn’t a one-trick pony.
I think SNOCAP’s inability to monetize was ultimately a result of bad-timing; the market was not ready for digital registry/fingerprinting, but it will one day soon.
Great value pickup for imeem, on the heels of their brilliant anywhere.fm pickup.
FreshBreakfast is correct in pointing out the strength of SNOCAP’s, easy to embed, functional storefront that enables micro-transactions and allows indies to sell individual songs directly.
That being said, this app could be done better and made more artist friendly, particularly in the area of micro-purchase fees and sound quality.
As all music becomes indie, there is a genuine demand for this app, hopefully imeem sees this potential and continues to develop it.
We’re one step closer to seeing Shawn Fanning taking EMT classes on VH1.
Michael you should check into the Snocap funding info you have put up. Snocap raised 15 million in Series C alone with Courtsquare Ventures in early 2006 ( http://www.stan...30;..elease.pdf ). Pretty sure they raised much more than the 10 million you mention in your post. Having followed SnoCap since the begining, I don’t see how anyone got out smiling. cheers.
http://www.stan...s%20Release.pdf – funding press release – link above is broken.
Imeem should have aquired SoundLoud and their SoundStation Music Store rather than Snocap and their Mystore which by the way is under litigation for trademark infringement by the folks at mystore.com. SoundLoud has been paving the way as the Snocap replacement. Everything snocap has done wrong, this company is doing right. Check them out for yourselves at http://www.soundloud.com
Jason, you are a piece of work.
good