Digital music provider Musicbank closed its doors Tuesday night because of a lack of funding. About 40 employees have been let go.
Musicbank, which was set to offer a streaming service similar to MP3.com’s my.mp3.com music storage system, launched as a company in June. It had received on-demand digital streaming licenses from the five major label groups – Universal Music Group, Warner Music Group, EMI, BMG Entertainment and Sony Music – as well as the music publishers. The service, which was in a beta test, was set to launch this year.
“Recent legal rulings and market conditions added to the general uncertainty while we were in the middle of securing our next round of funding and partnerships,” a Musicbank spokeswoman said.
Musicbank was financially backed by Atlas Ventures, Bertelsmann Ventures, Bonanventure Investments Ltd. and Universal Music Group. The San Francisco-based online company also had an exclusive retail partnership with Virgin Megastores. It remains unclear what will happened to Musicbank’s assets.