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 find this intriguing, especially considering the total failure of the company’s “jump-the-gun” launch a Midem in January 2008. Coming a week after ad-funded model Spiral Frogs 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 indie labels as well. In its current form Qtrax users are required to download a web-based media player that allows users browse and play songs as well as displays ads in return for free downloads. However, the fact, any songs downloaded from the service are not compatible with iPods or macs renders it a non-starter in TMV 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 of where it has no less than 9 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 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 Spiral Frog 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 9 lawsuits from its investors and then a former advisor from a failed ad-funded business in TMVs 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!