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Datz closes
17:36 | Tuesday September 15, 2009
Datz is to call in the liquidators later this week, after closing its Music Lounge offering.
The company, which launched Music Lounge offering unlimited downloads from a number of indies as well as EMI and Warner last October, says it is unable to pay its debts to labels, making closure the only option. Datz managing director Michael Richardson explains that this also means a sale as a going concern highly unlikely.
The Music Lounge site closed around a week ago and the product has not been on sale for around the same time.
Richardson explains that the company’s problems date back to the closure of Woolworth’s: Datz’ sister company Comment ran a profitable business supplying Woolworths with mobile phones. Money from this was supposed to keep Datz on track with its payments to labels.
However, Woolworths’ closure at the end of last year mean that Datz was forced to operate as a stand-alone business and eventually ran out of money.
Richardson says he stands by the Datz model of offering unlimited downloads for a one-off fee. “If Nokia or Microsoft or another of the big players came up with the Music Lounge then no doubt they would be in a bloody strong position,” he adds. “Unfortunately a few oiks from Oxfordshire and didn’t quite have that clout.”
Readers' comments
Some of the facts in your story aren't quite right. Datz was still available in Sainsbury's as of Monday; eBuyer was still selling the product until Bitterwallet informed them of problems with Datz yesterday dinnertime. It appears Datz have not informed any retailers of their financial difficulties, or that the product as sold has been mostly unavailable for over a month. The other big question - aside from why has Datz ignored all enquiries from customers, media and retailers - is if Datz was dependent on money from Comment, why is Datz only admitting problems now? Comment went into administration in November, barely a month after the Datz Music Store launched. We've been following this story for the past month, and nobody at Datz has taken responsibility for the loss of the customers - some of whom paid £99 for a 12 month subscription. Datz was still selling this product at full price through their website three weeks ago, with no mention that they had lost the rights to the majority of the high profile artists it laid claim to.
As for Comment, accordng to Datz even after Woolworths closed they thought the Music Lounge was going to bring in enough money to be self supporting. I also asked about customers. They said that most customers were approaching the end of their year-long subscription. I didn't know it was still on sale though, so thanks.
Even if customers bought a Datz subscription on day 1 (the very end of October) the Datz library lost tracks from EMI and Warner in July, meaning customers lost over three months' worth of subscription - not to mention that Datz were still selling the product through their own website for full price three weeks ago.