US music-streaming firm Cür Media has raised $2m of funding, enabling it to pay $500k of advance payments to music rightsholders.
The $2m came from investors Intuitive Venture Partners and Katalyst Securities, and will also provide working capital for the company, which soft-launched its Cür Music service in the US earlier this year.
Cür Media had agreed to pay $8m in advances to labels and publishers by 31 January, in return for the rights to their catalogues. However, it missed that deadline, admitting in late March that it “was not able to make these initial payments when due”.
The firm signed extensions with the rightsholders ranging from 90 to 120 days, although it agreed to make its first payment to major label Sony Music earlier: by 25 March.
“Pursuant to the new payment terms, the first of the payments toward the Initial Content Fees were due on April 12, 2016. On April 12, 2016, the Company paid an aggregate of $500,000 to the Content Providers from the proceeds of the Note Offering,” explained Cür Media in a filing with the US Securities and Exchange Commision. ” The additional amounts are due to be paid by June 15, 2016.”
That gives Cür Media two months to find the other $7.5m of advances. For now, CEO Tom Brophy is stressing the positive side of the funding round.
“I’m pleased to have completed this financing and to move our company one step closer toward the launch of Cür Music,” said Brophy in a statement. “We intend to work diligently to move our company forward and deliver on the great potential of Cür Music in the multi-billion dollar music streaming industry.”
The company still finds itself in a challenging situation. In its previous corporate life, Cür Media was a Pandora rival called Raditaz, which shut down in late 2013 before re-emerging as Cür Media in a reverse-merger that took the company public.
Update: Cür Media also published its delayed financial results for 2015 last night. They reveal that the company posted a net loss of $8.5m in 2015, following a $6.2m loss in 2014.
Across those two years, Cür Media has spent $11.9m on R&D and $3.1m on general and administrative costs, with no revenues since it closed down its previous service Raditaz in late 2013. Cür Media ended 2015 with $14.3k of current assets and $4.3m of current liabilities.
“We plan to bring Cür Music to market in the third fiscal quarter of 2016. In order to do so, we need to raise approximately $15.0 million, to implement our business plan, market Cür Music, for content license costs, and for general working capital,” explained the company in its annual results.
Cür is using MusicNet to source its catalogue, Amazon and other cloud providers for hosting, and Rovi to generate playlists for its listeners.
The filing also outlines Cür Media’s three-year licensing agreements with labels and publishers, and the minimum guarantees it has agreed to pay: $14m in its first year, $25.5m in its second year, and $18.5m in its third year.
For now, it only has licensing deals with major labels, but plans to strike agreements with “certain independent labels” before its full launch in Q3. “We also intend to enter into content licensing agreements with music publishers and publisher rights organisations,” explained the filing, hinting at more negotiations to come.
Cür Music could be an interesting addition to the streaming market. It currently has two tiers: ‘Octo’ for $1.99 a month and ‘Inked’ for $4.99 a month. Both offer Pandora-style internet radio stations, as well as a ‘Cür8’ feature where people choose their favourite songs that can be listened to on-demand.
Inked adds offline listening and lyrics. Later this year, Cür Media says it will add a full on-demand tier for $9.99 a month. But for now, it will be juggling product development with the task of securing the necessary funding to pay the remaining $7.5m of advances by 15 June.
A Wall Street Journal profile of the company in early March claimed that some labels hoped that Cür Music would be able to tempt younger music fans into a monthly music subscription, although it also cited one label executive as admitting ‘his company had agreed to license its music to Cür primarily because it didn’t want to turn down the advance money’.
Earlier this week, Universal Music’s digital boss Michael Nash told Music Ally that labels are keen to explore new streaming models beyond the current $9.99-a-month template.
“Do we need to have diversity in our approach to the consumers and to put different offers in place in the market? Absolutely. We will continue to want to experiment to support new models,” said Nash.
It would be ironic indeed if those promised advances that were so difficult to turn down become an impediment to a successful launch for Cür Music – which looks like it could be one of those new models – let alone its longer-term ambitions to boost the wider music-subscriptions market.