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Despite WMG and Shazam deals, Vadio is up for sale


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Music videos distributor Vadio has laid off most of its staff and is looking for a buyer, despite signing high-profile deals with Warner Music Group and Shazam in 2016.

“We were on a massive trajectory. Frankly, we didn’t raise enough capital out of the gate,” CEO Bryce Clemmer told the Portland Business Journal. “Given all the deals that needed to be done, a company like this in the music video vertical ultimately requires upfront investment to secure the content from the owners and build the team.”

Vadio did raise quite a bit of capital: $10m, including $7.5m in its 2015 Series A round of funding. The ending of a partnership with Vevo in 2015, forcing Vadio to strike direct agreements with labels, appears to have been the start of a slippery slope.

“This expedited the timeline to work directly with labels for content. That was something we didn’t raise capital to do,” said Clemmer.

Given many VC’s wariness of investing in a startup only to see that money go straight out of the door to music rightsholders – not to mention a wider squeeze on follow-on funding rounds – it is not surprising that Vadio has struggled. The question now is whether it can find a buyer.

Stuart Dredge

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2 responses
  • Stephen says:

    Founders: “Hey we’ve created a new great product and platform for the music industry”
    Labels/Rightsholders: “We love it. Great. Your product is really cool. We are always looking for a new and better way to connect fans, artists and music.
    Founders: “I’m so happy you love it. We really believe in our product, we just need some content and a license”
    Labels/Rightsholders: “Yes. That will cost 10 million dollars, 8 up front. And we’ll take 20% of the company”
    Founders: “Here is our borrowed money, take it, we’ll raise some more and figure out a way to make money off this later. ”

    Later….

    Founders: “We are closing down. We can’t make money or pay anyone back. Sorry.”

  • boomboxr says:

    This is an ongoing issue. Isn’t a large part of Spotify not being profitable is the fact that they have to pay the traditional industry for catalog?
    Artists, check out Resonate.is

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