DataPlay poised to close doors

By | October 1, 2002 at 12:00 AM

DataPlay, a company attempting to replace CDs as the music format of choice, has missed its announced release date and appears unlikely to survive.

Employees were put on mandatory leave and told to call in Friday for a status update, according to a source close to the situation. Only those staff members with vacation days available will receive any payment.

Zomba Recording Corp., Universal Music Group, EMI Group and BMG Entertainment in March announced plans to distribute music using DataPlay discs. DataPlay discs are about the size of a half-dollar and resemble a tiny CD encased in a translucent shell. The technology is designed to resist piracy but permit consumers to make personal copies and compilations.

The company had raised $119 million in three rounds of funding since May 1999 from such investors as Trans World Entertainment, Eastman Kodak, Olympus Optical, Intel Corp., Toshiba, Samsung, venture capital firms and individual investors like musician David Crosby.

The discs and required special hardware were scheduled to appear in retail stores June 11, supported by high-profile advertising on NBC’s “Today” and “The Tonight Show With Jay Leno” and CBS’ “Late Show With David Letterman.”

Representatives of DataPlay had not returned calls by press time. At its peak, the company had 240 employees, of which about half remain. DataPlay is headquartered in Boulder, Colo., with offices elsewhere in the United States as well as in Singapore and Japan.

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