Leading music industry start-up Songkick is set to go to trial with Ticketmaster and Live Nation over antitrust violations in November, but will the company even make it to see their court date?
Founded in 2007, Songkick was built as both a concert recommendation and a ticket sales platform. Using the app or the website, fans receive listings of events customized to their location and music preferences, with the option also of purchasing tickets to those events. According to Digital Music News, this business model earned Songkick $60.82 million from ten investors over the past ten years, seemingly putting them in a good position to compete with other ticket giants like Ticketmaster.
Twenty-five of that $60 million came from Access Industries, the parent company of Warner Music Group. Just last month, the Songkick name and concert suggestion service, which according to them attracts 15 million users a month, were purchased by Warner Music Group for an undisclosed price.
So why is the sustainability of this would-be successful company in question?
A source close to Songkick told Amplify that much of the money is already gone. Thousands were was spent by executives on luxuries like expensive PR firms, SoHo House memberships, first-class flights for founder Matt Jones to London, Los Angeles, New York, and Nashville, and of course, the millions spent on their legal battle with Ticketmaster, which began back in 2015.
Songkick is suing Ticketmaster and Live Nation for charges of company interference and unfair competition. Songkick first requested preliminary injuction on the basis of “irreparable harm”, which the judge denied. Then they accused Ticketmaster of destroying evidence, which was also ruled down. In February of this year, the lawsuit was amended with allegations of hacking into their system and stealing trade secrets. As it turns out, said “hacking” was actually just a former employee who now works for Ticketmaster, but still had access to Songkick accounts, as the company had not changed any passwords.
Believe it or not, the two music companies had a beneficial relationship before this dispute. Songkick was earning money from Ticketmaster by driving traffic to their site before they sued, which the aforementioned source claims “killed the best thing they had going for them”.
Now, Songkick has let go most of its staff and is not accepting any new customers, at least until the trial in November. This move may keep the company in business until then, but if they win, they will likely earn just enough to get back on their feet after lavishly blowing all of their investment money into the abyss.
Last Updated on August 30, 2017 by Sean Burns