Songbird Sings Its Last Tune As Music Service Runs Out Of Money And Plans To Shut Down June 28

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Songbird, an early digital music service that aimed to compete against the iTunes, Pandoras and Spotifies of this world with an open source platform, is shutting down on June 28, after running out of money and failing to find a buyer. The startup, backed by Sequoia, Atlas Venture and Phillips, had raised at least $11 million and is planning to formally announce the news on its own site later today.

“Unfortunately, the company has found ourselves unable to fund further business operations and as of June 28, 2013 all of Songbird’s operations and associated services will be discontinued,” CEO Eric Wittman wrote in an email to TechCrunch. A post in Digital Trends on the closure notes that a sale of the company had fallen through at the last minute.

Songbird is the flagship product launched back in 2007 by Pioneers of the Inevitable, first as a desktop open source alternative to iTunes, and more recently as an online, Android and iPhone app that also offers ways to stream music, incorporating different audio formats and making an especially strong emphasis on higher-quality audio FLAC files, and offering YouTube-powered access to playlists. The online social music service, songbird.me, was attracting over one million users each month, Wittman says.

The open-source code behind Songbird was used as the basis for other services that could then customize the look and features (and subsequent monetization) around it. That code is still available to download, but it’s not sure for how long, and it’s also the basis of a service, Nightingale, that Wittman and Songbird are now recommending as an alternative to Songbird’s users.

It looks like POTI will close along with the demise of Songbird. It is unclear how many employees will be affected. We have reached out to the company, as well as its investors, and will update this post as we learn more.

You can see how it may have been hard for a company like Songbird, which lost its founder Rob Lord back in 2009 amid a bid to improve its monetization, to compete and get enough scale in the margin-squeezed world of digital music.

On the download side, companies like Apple’s iTunes and Amazon are oversized players. Meanwhile, mindshare (and marketshare) in streaming music services go to Spotify, Pandora and to a lesser extent companies like Rdio and Deezer; and there are yet more, well-backed names wading into the game every day, including Apple’s iTunes Radio and Twitter Music.

Update: that announcement is now live, and Wittman has also answered some of our questions. He says that plans for Songbird now are to work on placing the team members to “do our best to transition customers and to find a buyer for the assets. We’ll be working hard to do all of this over the next few weeks.”

He notes that the company, after a restructure in 2012, had 11 employees. “These folks were rock stars in their respective areas and loved working together as a team and did so very well.” It was during the restructure in 2012 that Wittman, who had been SVP of product, became CEO. He’s been with the company since June 2011.

“We currently have enough [cash] to sustain minimal operations through end of the month,” he adds. The company had been in the middle of pivoting the business from being one primarily focused on licensing our Desktop product to 3rd parties to one focused on offering premium features such as remote music collection access; music in HD formats like FLAC; and advertising. “Sadly we were unable to make this transition in time before cash ran out.”

And we have also heard back from Sequoia, which noted that it had actually sold its stake in the company after the partner who led the investment left the firm. A spokesperson wouldn’t provide more details.