Jamendo running out of money. And time?

Jamendo, the platform for Creative-Commons-licenced music, lacks incredible 1.5 million euros (more than 2 million USD). Now the owners and investors seek to merge or sell the project, whereas many users raise the question, whether Jamendo will hit the deadpool quite soon.

From time to time TuneInn is switching languages. Then the blog on music-business presents new developments straight from Europe, in an international perspective.

Jamendo provides 200.000 tracks, some better than others, but overwhelmingly professional. All of them are licenced under Creative Commons. Musicians can publish and share their songs for free. Others can download this music for free. If somebody – and here comes the business model – wants to use the music for commercial purpose, Jamendo sells a special license. Artists then get 50% of the sales.

But obviously the model doesn’t work. Back in 2007 Jamendo recieved a “significant amount” of funding by main investor Mangrove Capital. Now the company from Luxembourg wasn’t able to raise new money. Mangrove Capital was not willing to give another 1.5 million euros, which leads both sides to search for a buyer or a candidate to merge with. CEO Laurant Kratz confirmed that Jamendo is already in talks.

The main problem will be the not quite so good working business. In 2009 Jamendo was only able to attract some 2300 paying customers, who spent roughly 300.000 euros. “In the current formation the company isn’t stable”, admits CTO Sylvain Zimmer. One reason might be that Jamendo isn’t promoting it’s premium service enough. Prices are very competitive (especially for shop- oder restaurant-owners), but there are too much ways to get to the music for free. Who controls the usage of the downloads anyway? And how are professionals going to find the right music out of thousands of songs, where there’s no partner to help?

The tightrope walk between open for anyone and selling professional music might be just too difficult. At the moment Jamendo is searching for the help from its users. But will donations save the platform from ending up in the deadpool?