Total Music shuts down

Firm felt effects of iTunes store, falling CD revenue

DENVER -- Total Music, the joint venture backed by Universal Music Group and Sony Music Entertainment, among others, has shuttered. Multiple sources directly involved in the venture said all concerned agreed to stop funding the effort, citing both business and economic factors for doing so. Sources spoke on background due to NDA agreements.

"Total Music as it is now, is over," said one. "With resources being limited these days, we prioritized everything and realized we could accomplish the same thing in some of the other areas where we were working."

Among the business factors that led to the decision is the continued dominance of Apple's iTunes music store, the rise of free ad-supported streaming services and the overall downturn in Internet advertising.

Those involved say these collective challenges were not insurmountable by themselves. But adding the ongoing economic climate, which is placing added pressure on record labels already hurting from plummeting CD sales and revenues, proved too much to bear. "Current conditions are such that funding something like that is tough to justify," said another source.

The Total Music story was a complicated one from the start. It first emerged in the summer of 2007 as a concept for providing music to various services and devices. Championed by UMG chairman and CEO Doug Morris, the strategy was to encourage device manufacturers and service providers to bundle the cost of a music subscription service into the cost of their products. The closest example to see the light of day is Nokia's Comes With Music service, which offers a year's music subscription into the cost of compatible phones.

That idea later evolved to the formation of the Total Music entity, which aimed to create a digital music subscription service that could then be licensed to partners under the same model as part of a complete solution. The venture acquired the college-focused music service Ruckus to provide the backend subscription capabilities for that plan.

But the entire evolution remained shrouded in mystery. None of the parties involved ever formally laid out the details of the initiative, preferring to keep mum on the details. The acquisition of Ruckus, for instance, was never announced, nor was the addition of Sony or any other labels.

Last year, the Department of Justice began asking questions about the legality of these competitors joining forces on the effort, but it was more of an inquiry than a full-scale investigation, and those involved say it played no role in the venture's demise.

While the legal entity behind it is no more, sources involved in the effort say the concept behind Total Music lives on. Bundling access to music with other services and products remains an interest for the labels involved, something they are likely to continue pursuing either individually or through continued cooperation, but on more of a case-by-case basis.

And while Sony and UMG may no longer be working together as part of the Total Music venture, the process of forming the entity and working together on it since has laid the groundwork for other types of collaboration.

"The concept of Total Music will express itself in some other way," said a source involved in the effort.
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