Battling Ticketmaster Lawsuit, Songkick Struggles With Skeleton Staff
Things are looking grim for Songkick. The ticketing company was forced to drop the majority of its staff, and has its fingers crossed to win a fast-approaching lawsuit against Ticketmaster in hopes of being able to complete its existing contracts.
Guest post by Dave Brooks of Amplify
Ticketing company Songkick has let go most of its staff and is hoping against long odds to win its upcoming lawsuit against Ticketmaster so that investors can recoup some portion of the $90 million they’ve invested in the fan club ticketing service and music discovery app.
The small company is working to fulfill its outstanding ticket contracts and finish up some existing business, but operationally the company is not accepting new customers. Its popular song discovery app is now operated by Warner Music Group, whose owner Access Industries invested $80 to $90 million in Songkick. Warner has supposedly taken over the company in what Songkick is calling an “acquisition” but is more akin to a liquidation, according to sources familiar with the situation.
“The fact they are trying to spin this as an acquisition is an appropriate ending to a company that has mislead the public and investors since they started raising money and sued Live Nation,” one source tells Amplify.
When Songkick filed its lawsuit against Ticketmaster in 2015, it asked a judge in the case for a preliminary injunction, arguing Ticketmaster was causing the company irreparable harm. That request was denied.
Lawyers then made headlines when they accused Ticketmaster of destroying evidence in the case — and again, U.S. District Judge Dale Fischer ruled against Songkick, saying there was no proof any evidence was destroyed. In February, Songkick alleges it was hacked by Ticketmaster — it turned out Songkick hadn’t changed any of its passwords after several employees quit. These employees, now under the employ of Ticketmaster, we able to utilize their logins to access parts of the Songkick system.
“In every case, Songkick comes out swinging with these allegations, the press picks it up and then no one ever follows through,” our source says. “Each allegation turns out to be a nothing-burger, but by the end no one cares.”
On top of it, Songkick has spent thousands on expensive PR firms to bully some in the media, and ex-employees said founder Matt Jones spent big bucks on first class flights to the company’s offices in London, Los Angeles, New York and Nashville. Coupled with pricey SoHo House memberships and tens of millions spent on a lawsuit, it’s not hard to see how the company could burn through money.
Songkick is set to go to trial with Ticketmaster in November over allegations of interference and unfair competition, among other charges. Ticketmaster attorneys had sought to delay the trial but were overruled. A victory in court could mean a significant payday for Songkick owners Access Industries, but several individuals familiar with the company’s attempt to sell itself prior to the Warner acquisition say the numbers the company is using are greatly inflated.
One figure from the lawsuit — that Songkick was processing hundreds of millions in sales — was said to be “totally bogus.”
“The biggest thing they did was the Adele pre-sale and that generated about $80 million for them in total sales, but we estimated they probably lost $200,000 to $300,000 trying to execute their end of the agreement,” our source says.
“Fan club ticketing doesn’t scale, at least not the way Matt thought it would,” another source tells Amplify. “The money they were making just doesn’t add up to the money they raised.”
The company’s music recommendation engine was one of the few things seen as valuable — our source says it enjoyed nearly ten times the traffic as rival app Bandsintown.
“They drove a lot of traffic to Ticketmaster, but because they were suing Ticketmaster, they didn’t collect any affiliate money, which just killed the best thing they had going for them,” our source tells Amplify, adding the lawsuit also made it difficult to do a deal with Spotify because the streaming giant was working with both Songkick and Ticketmaster and was worried about getting dragged into a fight.
“The one part of their business that seemed to be working was hurt by the lawsuit,” our source says. “I’m not surprised there weren’t any buyers.”
Dave Brooks has over 15 years experience as a writer, including eight years as the Managing Editor of Venues Today. He started Amplify in 2014 to give the industry its own voice and turn up the volume on live entertainment.