Loudeye continued a rash of major changes in its strategic operat...
Loudeye continued a rash of major changes in its strategic operating plan released Wed. The company said it’s largely leaving the U.S. music market and focusing on European operations. In Dec. the firm closed lagging antipiracy unit Overpeer, which…
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seeded P2P networks with “spoof” files (WID Dec 20 p3). About 80% of 4th-quarter revenue was generated from digital media store services, and nearly all of that came from Europe. The firm is moving its base for those services from the U.S. hq in Seattle to the European hq in London. The Seattle office will continue operating its digital media content services like encoding and samples. Loudeye has also scrapped plans to create a “custom digital music service for an unnamed North American retailer,” a launch that was previously delayed. The changes are expected to reduce costs $2.5 million a quarter -- 30% of 3rd quarter 2005 levels. Cost savings, including job cuts and “possible funded development,” will be realized before 2nd quarter, Loudeye said. The firm also released preliminary 4th-quarter results: $8.8 million revenue, up from $5.5 million in 4th quarter 2004 -- although that excludes Overpeer’s revenue, which will be included in the loss from discontinued operations. Digital media store revenue was $7.1 million, up 92% year-over-year. “Substantially all” 4th quarter growth came from “promotional services revenue from an Internet service provider in Europe,” Loudeye said. Quarterly gross profit is expected to be $1 million, and excluding Overpeer and “potential charges related to goodwill and other long-lived assets,” the company expects a “narrow” GAAP net loss relative to 3rd quarter 2005. The company warned it’s regularly experiencing “significant losses” and has limited cash reserves -- $10.8 million at the end of 2005 compared with $16.6 million at the end of Sept. Full-quarter and 2005 results are scheduled for release Feb. 23.