The Record Industry's Failed TotalMusic Project Finds A New Home At Project Playlist

Remember TotalMusic, the failed music initiative created by Sony BMG and UMG that was built from the start with the goal of serving as Facebook’s music platform (and was ultimately rejected by the social network)? Its assets were recently acquired by Project Playlist, the troubled music streaming startup that just lost its CEO to MySpace last month and has had lawsuits pending from the major record labels since late last year.

Playlist will apparently be leveraging some of the tools and API capabilities developed by TotalMusic during its Facebook courtship, but it’s still unclear how exactly these will be used. Much of TotalMusic’s appeal and innovation lay in its unique free song licensing scheme, which was going to offer Facebook free music streaming in exchange for user data and ad revenue. Playlist isn’t going to be able to get the same kind of licensing deals, which means this deal is primarily for TotalMusic’s technology (which has yet to be seen publicly) and personnel. And in more somber news, both companies will be losing “overlapping” employees in the process, with around a dozen people affected.

That said, the deal may indicate that things are looking up for Project Playlist’s legal battles – UMG was one of the intitial stakeholders in TotalMusic, and if they were somehow involved with the acquisition it may indicate that the record label is looking to play ball with Playlist. Warner would remain the lone holdout remaining on the lawsuit if that was the case (EMI, which was previously involved in the suit, decided to license its catalog to Playlist in March).

Playlist has also announced that it has closed publishing deals with Sony/ATV and EMI. The company had previously had streaming rights to these catalogs, and will now be able to sell these songs as well.

We recently acquired assets and employees from TotalMusic LLC, a digital catalog management and reporting system. This acquisition is an important platform that will allow us to host a streaming music service, help us with e-commerce solutions and provide a set of application programming interfaces that will be invaluable to us as we offer next generation digital music services to our users.

Today we are integrating the assets of TotalMusic into our Playlist operation. As a result we have to address some overlap in certain areas and let some employees go both from Playlist and Total Music. This is no reflection on the talent of the people we had to release, rather a responsibility we have to run a lean organization with no redundancies and clear lines of reporting. This often happens when two companies merge, but it is never easy.

On a positive note, we are very excited about the progress we are making. With the Total Music acquisition and our recent licensing agreements with Sony ATV and EMI Publishing, we are developing new features and services everyday that will form an even deeper bond with our 45 million loyal users and create new revenue opportunities for our company as well as our music content partners. More to come, watch this Space!!