Riffage, which let unsigned artists post their music on its Web site, made waves last year when it bought San Francisco's Great American Music Hall and an independent record label, 1500 Records. Although giants such as Bertelsmann Ventures, America Online, and BMG Entertainment backed the company, it soon found itself running out of funds and shut down in December.
Luke Helm, a consultant for Diablo Management Group, which was commissioned to dispose of Riffage assets, confirmed Wednesday that Loudenergy purchased the online assets of the company but that no one has purchased the venue or record label. The sum of the deal was undisclosed, but Loudenergy said it will acquire more than 1 million registered members, 30,000 songs, and 20,000 bands from the deal.
Loudenergy Chief Executive Ruben Lozano said the company did not purchase 1500 Records because it has its own record label, LE Recordings. It did not buy the Great American Music Hall because the company is "more interested in working with established venues," he said.
Riffage is the latest online music company that has been bought out by another dot-com, closing a chapter of music start-ups that have failed to survive the battered dot-com economy. In March, Net music veteran Internet Underground Music Archive, one of the first to tap into the online music scene, was acquired by digital music provider Vitaminic.
"It's probably a good move (by Loudenergy) because in a market like this, the stronger just get stronger when the weak fall aside," said Phil Leigh, vice president of digital media research at investment company Raymond James & Associates. "If Loudenergy has enough money to keep it going, they have a shot of doing something there."