Wednesday April 11 3:58 PM ET
Musicbank Ceases Operations
LOS ANGELES (Reuters) - Internet music company Musicbank has ceased operations, according to a statement on its Web site on Wednesday.
``For over a year Musicbank has pioneered efforts to unite music lovers with their CD collections online. We are sorry to say that we are closing our doors,'' the Web site said.
The company, formed in November 1999, had tested its Web site, designed to act as a ``storage locker'' for fans to access personal music collections, but it never launched a commercial version of the service.
Company officials were not immediately available to comment. Industry sources said the company laid off about 40 staff members this week.
Musicbank had relationships with all the major recording companies, such as Universal's (EAUG.PA) Universal Music, Sony Music (6758.T), Warner Music (NYSE:AOL - news), EMI Group Plc (news - web sites) (EMI.L) and Bertelsmann AG (news - web sites)'s (BTGGga.D) BMG.
But it had struggled recently to obtain financing against the current backdrop of consolidation and bankruptcies in the Internet arena, industry sources said.
According to VentureOne, a research company owned by Reuters Group Plc (RTR.L), Musicbank received three funding rounds in 2000 for a total of $40.2 million. Investors included Atlas Ventures, Bertelsmann Ventures, Bonaventure Investments and Universal Music Group.
Musicbank had also secured licensing deals with Warner Music Group, Sony Music Entertainment and EMI Recorded Music.
