Qtrax Relaunching? What About all the Lawsuits it is Facing? TMV Drills Down on Qtrax
By Jakomi Mathews on Apr 14, 2009 with Comments 31
Interestingly according to both Billboard, The Financial Times and a Qtrax press release the subsidiary of Brilliant Technologies company has re-launched in the United States. TMV finds this intriguing, especially considering the total failure of the company’s “jump-the-gun” launch at Midem in January 2008. Coming a week after ad-funded model SpiralFrog’s demise and reports of troubles at other ad-funded model Imeem, TMV drills down and examines whether this re-launch is once again lots of loud words with no foundation or if there may be deeper problems of the legal type for the company.
But first this re-launch of the service apparently includes all four major labels and some indies as well. In its current form Qtrax users are required to download a web-based media player that allows users to browse and play songs as well as displaying ads in return for free downloads. However the fact that any songs downloaded from the service are not compatible with iPods or Macs renders it a non-starter in TMV’s view. To not have tracks compatible with the iPod which has on a global level shipped more portal digital music players than any other hardware manufacturer is just plain stupidity…
But moving on to more important aspects of the service. According to Wayne Rosso’s blog Qtrax is currently in the position where it has no less than nine lawsuits from investors seeking their money back. The mother company is registered in Delaware, which is, if you do your research, very similar to numerous tax havens the recent G20 conference in London agreed to close down!
Interestingly, although it is a publicly traded company it has not filed any financial reports with the SEC since May 2007 – quite frankly a breach of law in the United States. Drilling down further, Brilliant Technologies and Qtrax CEO Allan Klepfisz has also stated that this relaunch had been “a very expensive exercise…requiring tens of millions of dollars”, primarily from wealthy individuals and boutique investment funds. Yet what he forgets to mention is that several of these “wealthy individuals and boutique investment firms” have filed lawsuits against Qtrax parent company Brilliant Technologies.
Thanks to Wayne Rosso’s research (by just searching the NY Supreme Court online records) the companies who have filed lawsuits and links are included here: PLATINUM LONG TERM GROWTH IV, LLC and J&N INVESTMENT LLC, ALPHA CAPITAL ASTALT, CORNIX MANAGEMENT LLC, CAMBRIDGE MERCANTILE CORP, OSHER CAPITAL INC, and JBN INVESTMENT LLC. Check them out for yourself it makes interesting reading.
TMV does wonder how Jason Berman former head of the RIAA and IFPI feels about being on the advisory board of a company with so many lawsuits? Drilling down further: former SpiralFrog CEO Robin Kent, who departed from Spiral Frog a year before it went down the toilet has been acting as an advisor to Qtrax as well.
So a company with nine lawsuits from its investors and then a former advisor from a failed ad-funded business in TMV’s view does not make a good business proposition. In all we are surprised that the majors licensed their content to a company with such a dire track record. We think it was probably because they received nice up-front advances which will never see the light of day in artist royalty checks and goes straight to label bottom line. Food for thought anyway!
Other readers also read:
Music Lawsuits Move Beyond Music, Targeting Merchandising Cash Cows
Qtrax CEO Tells The Truth Or At Least The Courts Do
Qtrax Update: More Lawsuits & Judgements, No Portability Launch…
Filed Under: Business Models • News
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[...] Qtrax Relaunching? What About all the Lawsuits it is Facing? TMV Drills Down on Qtrax Qtrax Update: More Lawsuits & Judgements, No Portability Launch… Qtrax CEO Tells The Truth Or At Least The Courts Do Share and Enjoy: [...]
[...] Qtrax relaunching? What about all the lawsuits it is facing? TMV drills down on Qtrax Share and Enjoy: [...]
Though Allen’s attorneys contacted people who sued them, they never entered appearance in the court. They only tried to make ‘cent to the dollar’ offer.
Appears that judgments have been entered into against Qtrax
Oh. And I forgot to ask. Are you one of those idiots who actually bought Qtrax stock or just a shill for Klepshitz?
Well, young man (and I assume that you are a man), you are right in one respect–we were supposed to launch, actually in Q2 2007. I have told the whole story behind Mashboxx on my blog, so I suggest that you check it out. I see that you also posted the same comment on my blog as well. Unfortunately you have no idea what you’re talking about. We did have signed REAL p2p deals with the labels. I would post them but they are confidential and legally I cannot do so. And we had a working client. Unfortunately at the 11th hour our investors had a problem with one of their other business and pulled out of all new deals in order to focus on the issues they had with that particular business. Out of respect to the investors, I don’t mention their name. But it would certainly shut you up if I did. And everyone in the business knows the real story. I’ve been very candid. So this merely shows that you do not have access to people in the know. One thing is for sure though: the Spiralfrogs and Qtrax’s of the world certainly made it even more difficult to find venture capital as they had shit models and only succeeded in muddying the waters. Ever ask yourself why no legitimate venture capitalists invested in either? And everyone in the know will also admit that Mashboxx was way ahead of the curve and had not only the full support of all of the majors but also the best model that they had seen. If you actually could get any of the important players at the labels on the phone I’d suggest that you ask them. But then again…..
Hey Wayne, I’m still waiting for Mashboxx to launch ,Hows that going for you??Can’t wait legalized p2p no drm,international licensing ,when’s that baby launching?? Last I heard was supposed to launch in 2006,I’m still waiting ,or is it a fact you never signed any such deal with majors ,had no investors who believed in the product ,and no resolve to see through your vision. Where the hell is mashboxx ,you have not an ounce of credibility.
You’re pretty smart, Jessica. Kudos for seeing through the bullshit.
You’re pretty smart, Jessica. Kudos for seeing through the bullsjit.
Thanks Wayne. I noticed their downloads are remarkably fast, but I wasn’t sure whether they were in fact using some sort of P2P service on top of the open-source Songbird to accomplish it, or if they were simply serving the songs from a fast HTTP server; as such, I didn’t want to mention it without being absolutely certain one way or the other.
Jessica
Well said. But you left out one little issue. Qtrax has and does claim to be a p2p service. It is not. Yet they keep insisting that it is. A total lie.
@Rod: I don’t think anyone is blaming Robin. As a matter of fact, there is no mention of anyone blaming Robin anywhere on here, other than your accusation.
@Frank: I agree that this blog is painting a negative picture of Qtrax, however, that is the reality of the situation. The lawsuits speak for themselves; (I’d suggest you read the information provided by Jakomi pertaining to the lawsuits.) Furthermore, Qtrax on countless occasions has made public promises related to their product only to recant them days, weeks, months later. Here’s a company who made a very public launch in 2008, only to have announced hours later, that in fact, they never had any deals with the four major record labels. Then finally, once they managed to get a product together, they announced a version compatible for Macs coming in March 2008. It’s now May 2009 and there is still no Mac compatible version. Anyone with any technical knowledge would know they could never deliver on such a promise because Qtrax is locked into Windows Digital Rights Management for protecting their songs, and Windows DRM is not compatible with Macs at all. Then in 2009, they announced they would provide portability for their songs at last saying April 2009, only to now push that date back to May 2009 (which is quickly coming to a close with no portability in sight). They’ve also promised launches in other countries, and so far, they haven’t lived up to that promise either.
Funny thing is, I haven’t gotten to explaining the obvious flaws with the technical aspects of their product yet. The most likely deal breaker for anyone comes from the fact Qtrax makes use of Windows DRM to protect their songs. Thus, even if they ever enabled portability, you could only transfer the songs to Windows DRM compatible devices, which right there, excludes the iPod and Microsoft’s own Zune. As a result, they’re now catering to a niche market that is ever shrinking as Apple and Microsoft’s share is growing. If they ever wanted to be compatible with the iPod or Zune, either they would need to change or eliminate their DRM (like most of the major digital music services are now doing) or their customers would have to violate the Digital Millennium Copyright Act to remove the DRM from their files. Also, should Qtrax ever go out of business (like in the cases of SpiralFrog, Ruckus, MSN Music, etc.), their loyal customers would no longer be able to play the songs they downloaded since Windows DRM requires a license check every couple of days. As a result, their vast music collection is quickly wiped out with no recourse except to once again violate the DMCA to remove the DRM.
Lastly, from a business perspective, the core premise of Qtrax trying to appeal to illegal filesharers is flawed. As savvy minded individual, why would an illegal filesharer give up downloading songs for free, a method that doesn’t involve watching advertisements, doesn’t restrict how, when, or where they can use the songs, for DRM-laden versions of them which have many Draconian restrictions? It’s just madness if they think they’ll ever make in-roads into that market ever, especially since all of their predecessors haven’t been able to any great extent. Also, they are cheap alternatives, like iTunes and AmazonMP3, which provide the same library of songs but without any of the Draconian restrictions.
Sorry to burst anyone’s bubble here, there’s a reason Qtrax/BLLN is still a penny stock, valued at roughly 2 cents. It’s just not a viable business or product in its current form, and without any significant innovation to try to address these issues, I wouldn’t be surprised in the slightest if it joined the ranks of the defunct SpiralFrog, Ruckus, and MSN Music, in the very near future.
I hardly think that Robin can be blamed for the failure of Spiral Frog or that his being an advisor to another company deems a heightened risk for that company.
I am willing to blame him for the following, though:
1. Coca-cola has simply not tasted the same since Swine Flu can into the States. I don’t know WHY, but I am willing to blame Robin.
2. “They” stopped making new episodes of the Sopranos and I am still attending therapy due to the stupid final episode being stupid. I blame Robin.
3. My ex-girlfriend stole one of my movie scripts that I wrote 15 years ago and forgot about and optioned it this week. I am very pissed and I blame Robin.
4. I failed to buy XM/Sirius stock when it was ten cents. I blame Robin.
Robin really bites.
Rod
where’s my last comment? Don’t tell me you didn’t have a rebuttal
I must admit, after having read a few articles on this blog, I see how well Qtrax really is positioned. As far as a buissness models, the proof will be in the pudding. Let the consumer decide. I think what you have done with this article is try and paint a negative picture of the company, of which the end user cares nothing about. So if you really are interested in buissness models, you should be looking at the potential outcome of the model, not the ceo. Who do you think will benefit from this article? At least answer me that since you weren’t willing to tell my why you wrote it. Your’ agenda won’t be transparent until you tell us why you think the CEO is an issue to the model, and why it will ultimately affect the model and end users that will use it and monetize the service.
Some more recent lawsuits against Qtrax founder and just in the state of NY. Hear there are others in Arizona amongst other….
http://iapps.courts.state.ny.us/iscroll/C_PDF?CatID=463557&CID=600010-2009&FName=0
http://iapps.courts.state.ny.us/iscroll/C_PDF?CatID=447907&CID=603243-2008&FName=0
http://iapps.courts.state.ny.us/webcivilLocal/LCSearch
http://iapps.courts.state.ny.us/iscroll/C_PDF?CatID=447907&CID=603243-2008&FName=0
No agendas just…presenting what is on open record!
if you have no agenda, why have you written such an article? It is obvious you are joining ranks with other nay sayers in an tempt to create negative press around a fresh new product. We all know the company has made a few blunders along the way, but that being said, they have recently officially soft launched in the US. You can officially get free music, and the size of their’ library will soon topple I-tunes. hows’ them apples? The only worthy argument against Qtrax is that it is drm and that it won;t be I-pod friendly just yet. There is word going around that they are in discussions with apple, so the i-pod friendless is definitely in the works. As far as the drm issue, one only has to look at i-tunes to see that people were willing work with drm. So all these people who were willing to work with drm, now have been offered drm free music from i-tunes. But if I was used to drm, and a company comes along and offers me more music than I-tunes, but for a dollar less a song, I would have to ask myself, is drm really an issue for me? On another note, a lot of those law suits have been settled already. But I wouldn’t see you mentioning that in your article as that would not paint the same . No agenda? Let’s put it this way, what is your agenda by writing this article?
Lawsuits are normal amongst companies like Microsoft etc but not startups and not from a company’s investors against a company that has not even made a cent yet. Lawsuits are not generally launched by a company’s own investors unless there are serious reasons to do so.
The business model does not threaten any existing models as it is not P2P at all.
No personal agendas here. And I am not commenting on the actual product itself but on the CEO of the company and the lawsuits which are a matter of public record.
Nothing more nothing less.
Again shoot me because I’m an advisor to Qtrax, but I have to defend the founder. He is one of the most honest people I have ever met and smartest. I can absolutely guarantee you that if you walked in his shoes 24/7 and took the sh*t thrown at him on a daily basis from people with agenda’s you would think differently. I know a dodgy “entrepreneur” when I meet one and the Founder of Qtrax isn’t one. Law suits are normal among start ups, especially ones which are challenging the norm.
This business model threatens many existing models, they expect to be attacked, that’s business, but don’t let other people’s personal agenda’s get in the way of what will be a great product. While you are at it remind me of a launch that was perfect out of the gate.
The Music Void specialises in in-depth analysis and we occasionally undertake product reviews. Clearly Jeff did not read the story. If you had you would have realised that not only did we not review the Qtrax service, but we don’t know anyone that has even used it – The closest we have come is when found this link regarding the user experience at a site called http://www.idolator.com
I think that any reasonable person after reading the story, would have walked away with the impression the post was about the business practices of the Qtrax CEO based upon information found in the public record. Nothing more nothign less.
So if you have a complaint I suggest you address it to the clerks at the NY Supreme Court.
Ed
No need to get course Ed,I was posting my music experience with Qtrax because you describe what content is available,that you also have to download a web based media browser that displays adds as the user then downloads songs. As for the rest of your article I doubt the 95% of people who download music give a crap when they are downloading music from ILLEGAL sites, You should post this info on an investment board and call your self the business void but leave the music part out. As far as lawsuits see apple ,google microsoft haven’t they all been sued for “dodgy” practices.Delaware, according to your own link has 60% of fortune 500 co. registered there, are they also “dodgy” see the slant here Ed? In my eyes until they change regulations thats just good business practice. ciao baby
Very weird that someone would go out of their way to write such negative info about a positive product, without an agenda.
Hey I’m interested in the business behind the product not the product itself. That is clear in both the post and my comment above! Perhaps you should open your eyes before decrying something as bogus journalism Frank?
Or is it that you are just ignorant?
Just in case you are ignorant. LET ME BE VERY CLEAR I WAS NOT REVIEWING THE QTRAX SERVICE – I WAS REVIEWING THE CONDUCT OF ITS CO-FOUNDER
TWO ENTIRELY DIFFERENT THINGS
Ed
why don’t you try out the product , if you feel so inclined to review it. More bogus journalism if you ask me
Well actually I did research from a number of different sources all supposedly respected international publications and then put my own opinion to the story. What is wrong with that…I did not in anyway comment on the user experience of Qtrax, I was commenting on the founder behind the company – completely different things. I too hope one day a great legal P2P service is available, but one founded by an executive who is not a dodgy business many who has no problem ripping off rich individual investors!
whatever happened to bloggers actually doing their own research ,instead of copying information posted on another article or blog, I actually spent about 5 min downloading qtrax and have downloaded apprx. 350 songs to my library all free and all LEGAL I have been waiting for a service like this forever as I think many others also are.I don’t want to pay 1.29 for a song and I don’t want to steal to me this service is a blessing, any music lover will embrace this site ,
Ed
I understand the majors made the error first. I don’t mean to take it out on you, but I’m still a little hurt by what happened at the frog. I believe if I had stayed it might have made it. Unfortunately the founder and I disagreed over the execution. Sadly I’ve been proven right.
Robin.
Robin,
Have you managed to go back to the FT, The Guardian and Billboard and correct their statements which are factually incorrect. That is where I got my information and as such until I see them revise there stories I see no reason to amend the post.
Personally, I think your comment about blogs is unfair, especially considering we got the information we quoted from what are meant to be respected publications both in the general news, financial news and music industry spaces on a global basis…
Cheers,
Ed
Robin
I love you man. But I’m afraid that I never in the slightest most remote way ever referred to you in my post. In fact, I never even mentioned SpiralFrog! See here: http://www.waynerosso.com/Waynes_World/Blog/Entries/2009/4/9_Another_Lame_Qtrax_Launch.html
Hi Robin,
I apologise for the wrong facts being posted. Will amend.
However, I actually got that information not from Wayne Rosso’ blog but in actual fact from the Billboard story on the re-launch of Qtrax. You can check out their story and also get them to correct the facts here…http://www.billboard.biz/bbbiz/content_display/industry/e3id54466e9215cc2baef8395a483626b97
Cheers,
Ed
Wayne, Wayne, Wayne.
Why let the facts ruin a good story. I quote;
‘former SpiralFrog CEO Robin Kent, who departed from Spiral Frog a year before it went down the toilet has been acting as an advisor to Qtrax as well.’
I know you picked this up from another blog, but the facts are; I left the frog on December 26th 2006 and it went down sometime last month. I make that 27 months. Even with my supposed super powers it lasted way beyond my influence.
You may regard this as a small thing, but fact checking is too often overlooked in the blogging world.
Regards
Robin.
Thank you! Finally someone has pulled back the curtain to show the curiuos condition of brilliant technologies. Take a deeper look and you will see it is a 53 million dollar black hole.