After eight years, innovative UK-based online music service Wippit ceased trading today.
Speaking exclusively to Distorted Loop, the company explained: “Wippit has closed. After eight years of pushing the digital boundaries, Wippit can no longer compete in the current market climate. Thank you to everyone that has supported us over the years and apologies to those that will miss us.”
Discussing the closure of the service, which was among the first-ever legitimate UK digital music services, closure of which means the majority of digital music downloads now go through US-owned companies, a Wippit spokesperson said:
“Wippit finally succumbed to tough market conditions and the changing landscape in the retail market.”
The company – which launched well before the advent of most legitimate music services – battled hard to create space for its legitimate p2p vision. Over time, the company linked with EasyJet, Motorola, Evening Standard, Duracell, and Heineken. The company also successfully licensed catalogue from EMI, Warners and the other majors.
The company last year even managed to secure that holy grail of online music retail – exclusive access to offer rare Beatles footage for download as part of a deal with ITN Source.
Despite years of dedication to the vision of 21st century music retail, the company experienced first hand music label reluctance to fully engage with the evolving new market.
“Launching an all you can eat, legal P2P service before the iPod had even been announced as well as many other innovations (including a first with movie downloads) meant Wippit has been a great pioneer, but eventually a victim of our own vision and optimism,” the spokesperson explained.
Following the departure of former CEO and company founder Paul Myers last year, the Wippit brand and its 300,000 strong customer database is now owned by Wippit Grp Ltd.
Wayne Rosso on Wippit closure
We spoke with controversial digital music pioneer, Wayne Rosso, ex-CEO of Grokster, OptiSoft and formerly involved in Mashboxx. And he laid the blame for Wippit’s closure firmly at the feet of the labels.
“The truth is that (Paul Myers, Wippit founder) was the poster boy for trying to do the right thing and was shat upon for years for doing so,” Rosso said. “They fought him at every turn and made life extremely difficult – yet as far as the media goes he was doing the right thing.”
Rosso explained that the licensing process for distributing music from the labels is extremely complex and takes a great deal of time – but the advances they demand are even more of a turn-off.
“Labels want outrageous advances no investor would tolerate, so by being so difficult they turn investors off on the space…” And the advances levied are not level – some services pay more than others, Rosso claimed.
“There’s no money in content sales – content is a means to an end,” he added. “It will eventually be ads-supported and free.”
Castigating the labels for not understanding their own best interests, Rosso added: “I tried to explain to them the only way the could get back control of their business was to go MP3, because they were building Apple into a 800 pound gorilla…that the tail was going to wag the dog…
“One of the label heads said the following, ‘I have no problem with MP3s, but am I going to sell more product?’ I replied – do you think you will sell less, you idiot?”
On Wippit he remarked: “The record business doesn’t look upon the Wippits of the world as partners and try to help them. They look upon them as sources of advance income that they can milk knowing full well that they’ll put these start ups out of business saying “well its their problem”.
“They do absolutely nothing to help nurture the business and everything to kill it, as a result investors have no confidence in the business, making things even harder.”