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	<title>Wayne&#039;s World &#187; qtrax</title>
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		<title>The Failure of Free Music: Where&#8217;s The $50 Million?</title>
		<link>http://www.waynerosso.com/2011/11/08/the-failure-of-free-music-wheres-the-50-million/</link>
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		<pubDate>Tue, 08 Nov 2011 05:32:26 +0000</pubDate>
		<dc:creator>Wayne Rosso</dc:creator>
				<category><![CDATA[Digital Media]]></category>
		<category><![CDATA[Allan Klepfisz]]></category>
		<category><![CDATA[Brilliant Technologies]]></category>
		<category><![CDATA[Oracle]]></category>
		<category><![CDATA[qtrax]]></category>

		<guid isPermaLink="false">http://www.waynerosso.com/?p=2192</guid>
		<description><![CDATA[The last time we heard from our friends at doomed free music service Qtrax was last March when they launched for the fourth time in about as many years. The service launched with only subdued support from the major labels: EMI said that they had signed a &#8220;short term agreement&#8221;; Sony and Universal did not comment at all; Warner said they did not license their content to Qtrax. Since its dubious March re-launch, absolutely no new music has been added to the catalog. All tracks are tethered to the computer and wrapped in the obsolete Windows Media DRM requiring the Microsoft Silverlight media player for playback. CEO Allan Klepfisz promised a mobile client within weeks of the launch, but that has yet to materialize. Qtrax launched in 12 countries (Argentina, Australia, Canada, Chile, Colombia, Dominican Republic, Fiji, Malaysia, Mexico, New Zealand, Singapore, US), but as of last week the site only had 730 daily visitors and 730 daily page views, according to Wolfram Alpha. Sounds like their entire user base is in Fiji. At the time of the launch, Billboard wrote: But maybe it&#8217;s too late &#8212; for the U.S. market, at least. The Qtrax model, which placed an emphasis [...]
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			<content:encoded><![CDATA[<div id="attachment_2202" class="wp-caption alignleft" style="width: 310px"><a href="http://www.waynerosso.com/2011/11/08/the-failure-of-free-music-wheres-the-50-million/"><img class="size-medium wp-image-2202  " title="madoff" src="http://www.waynerosso.com/wp-content/uploads/2011/11/madoff100614_1_560-300x200.jpg" alt="" width="300" height="200" /></a><p class="wp-caption-text">&quot;Not a problem. I can can make it work.&quot;</p></div>
<p>The last time we heard from our friends at doomed free music service Qtrax was last March when they launched for the fourth time in about as many years. The service launched with only subdued support from the major labels: EMI said that they had signed a &#8220;short term agreement&#8221;; Sony and Universal did not comment at all; <a title="Qtrax &amp; Warner Music: Something Fishy In The Air" href="http://www.waynerosso.com/2011/03/07/qtrax-warner-music-something-fishy-in-the-air/">Warner said they did not license </a>their content to Qtrax. Since its dubious March re-launch, absolutely no new music has been added to the catalog. All tracks are tethered to the computer and wrapped in the obsolete Windows Media DRM requiring the Microsoft Silverlight media player for playback. CEO Allan Klepfisz promised a mobile client within weeks of the launch, but that has yet to materialize. Qtrax launched in 12 countries (Argentina, Australia, Canada, Chile, Colombia, Dominican Republic, Fiji, Malaysia, Mexico, New Zealand, Singapore, US), but as of last week the site only had 730 daily visitors and 730 daily page views, according to Wolfram Alpha. Sounds like their entire user base is in Fiji.</p>
<p>At the time of the launch, <a href="http://www.billboard.biz/bbbiz/industry/digital-and-mobile/business-matters-qtrax-inks-short-term-deal-1005059952.story">Billboard wrote</a>:</p>
<p style="padding-left: 30px;"><em>But maybe it&#8217;s too late &#8212; for the U.S. market, at least. The Qtrax model, which placed an emphasis on downloading, now seems better suited for an earlier age. In January 2008, consumers were more firmly rooted in downloads. The iPhone had been out for only about seven months. Vevo didn&#8217;t yet exist. Lady Gaga, who now has over 1 billion YouTube streams, had net yet released her first album.</em></p>
<p style="padding-left: 30px;"><em> </em><em>Since then, consumers have started to shift away from downloads and toward the cloud. So have investors. The major venture capital dollars have flowed into cloud-based services that emphasize streaming and caching, not downloading.</em></p>
<p style="padding-left: 30px;"><em> </em><em>Most worrisome is the product itself, the preview version, a confusing experience to anyone weaned on more user-friendly music products like iTunes, Rhapsody or, well, anything else but this. Finding and listening to music on Qtrax is a cumbersome experience that seems out of place in a market filled with many slick, feature-rich, multi-platform services. If the hype over Spotify teaches us anything, it&#8217;s that a music service needs to be an incredibly well designed product. Clutter doesn&#8217;t work.</em></p>
<p>Everyone remembers the million-dollar egg that Qtrax laid at their MIDEM launch in January of 2008. At that time Klepfisz announced to the world press that he had deals with all of the major labels only to have <a href="http://www.wired.com/listening_post/2008/01/major-labels-al/">every major label issue denials</a> the very next day. Since then the media has paid little attention to the company, its credibility having been completely obliterated.</p>
<p>But that didn&#8217;t stop our man Klepfisz.</p>
<p>Even though he has not filed any reports with the SEC in years, or held a shareholders meeting, he marched to China. In October of 2009 he announced a huge search deal with Baidu and an impending China and Pacific Rim rollout that would commence that month and extend through the end of 2009. Didn&#8217;t happen.</p>
<p>One of his problems was money. After having been sued by numerous investors and vendors, including the <a href="http://news.cnet.com/8301-1023_3-10310731-93.html">IT consultants</a> he hired for his MIDEM launch, Klepfisz was hit with the mother of all lawsuits&#8211;he bounced a<a href="http://news.cnet.com/8301-1023_3-10296693-93.html?tag=mncol;txt"> $1.8 check to Oracle</a>. Klepfisz said that it was nothing but &#8220;a little tiff&#8221;. He ignored the suit, and when Oracle moved for a default judgment, he hired an attorney to make the classic <a title="Qtrax to Oracle: “The Dog Ate My Homework”" href="http://www.waynerosso.com/2010/09/14/qtrax-to-oracle-%e2%80%9cthe-dog-ate-my-homework%e2%80%9d/">&#8220;the dog ate my homework&#8221;</a> defense to the judge. The strategy slowed down the process for a couple of years, but ultimately did not work. Three weeks ago a federal judge in Oakland, CA granted <a href="http://docs.justia.com/cases/federal/district-courts/california/candce/4:2009cv03334/217433/76/">Oracle a judgment for $1.8 million </a>plus interest, bringing the total to a little over $2 million. Additionally, the court ordered that Qtrax had to return all copies of Oracle software in their control or possession.</p>
<p>Good news for Oracle, right? Not really. John Fife, a Chicago investor, sued Klepfisz for $1.3 million, got a judgment, and apparently worked out an arrangement with Klepfisz, only for the embattled CEO to renege. So Fife brought a motion for contempt of court and in the process a <a href="http://www.waynerosso.com/wp-content/uploads/2011/11/C_PDF.pdf">New York state judge froze </a>all of Klepfisz&#8217;s personal assets, ordering him to appear in court within 30 days to testify upon penalty of incarceration. So I guess Oracle is going to have a hard time  getting the bank to cash that settlement check&#8230;again.</p>
<p>But let&#8217;s not stop there. Last week four private investors in Flushing, NY sued Klepfisz for an aggregate of $250,00 plus interest and attorney fees. According to the filings, Klepfisz borrowed the money  in May of 2009 at an interest rate of 9% per year. (<a href="http://www.waynerosso.com/wp-content/uploads/2011/11/document-1.pdf">filing 1</a>, <a href="http://www.waynerosso.com/wp-content/uploads/2011/11/document-2.pdf">filing 2</a>, <a href="http://www.waynerosso.com/wp-content/uploads/2011/11/document-3.pdf">filing 3</a>, <a href="http://www.waynerosso.com/wp-content/uploads/2011/11/document-4.pdf">filing 4</a>) Obviously he decided he didn&#8217;t have to pay them back and of course he can&#8217;t get to his funds in order to hire a lawyer to defend the suits, even though he typically just doesn&#8217;t show up in court and takes a default judgment . He clearly knows how to game the system.</p>
<p>You&#8217;d figure that after over eight years and more than a reported $50 million there&#8217;d be more than 730 users and millions in judgments. This guy is sued more often than GM! So where did all the money go? Certainly not to the labels, they&#8217;ve kept him on the shortest of leashes. It sure isn&#8217;t in the technology or web site. Maybe he borrows money to settle lawsuits, then gets sued for not repaying those loans? Nah. Klepfisz does have a reputation for enjoying 5 star hotels and Singapore Airlines first class compartments. We&#8217;ll probably never know where all the money went. But I bet that Bernie Madoff could figure the whole thing out.</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p style='text-align:left'>&copy; 2011, <a href='http://www.waynerosso.com'>Wayne Rosso</a>. All rights reserved.  </p>

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		<title>Qtrax &amp; Warner Music: Something Fishy In The Air</title>
		<link>http://www.waynerosso.com/2011/03/07/qtrax-warner-music-something-fishy-in-the-air/</link>
		<comments>http://www.waynerosso.com/2011/03/07/qtrax-warner-music-something-fishy-in-the-air/#comments</comments>
		<pubDate>Mon, 07 Mar 2011 05:01:13 +0000</pubDate>
		<dc:creator>Wayne Rosso</dc:creator>
				<category><![CDATA[Digital Media]]></category>
		<category><![CDATA[Music Biz]]></category>
		<category><![CDATA[Stupid Marketing Ideas]]></category>
		<category><![CDATA[Abba]]></category>
		<category><![CDATA[AC/DC]]></category>
		<category><![CDATA[Allan Klepfisz]]></category>
		<category><![CDATA[Beatles]]></category>
		<category><![CDATA[Chicago Venture Partners]]></category>
		<category><![CDATA[digital music service]]></category>
		<category><![CDATA[Edgar Bronfman Jr.]]></category>
		<category><![CDATA[EMI]]></category>
		<category><![CDATA[Fleetwood Mac]]></category>
		<category><![CDATA[Green Day]]></category>
		<category><![CDATA[iTunes]]></category>
		<category><![CDATA[James Taylor]]></category>
		<category><![CDATA[Jimi Hendrix]]></category>
		<category><![CDATA[John Fife]]></category>
		<category><![CDATA[Josh Groban]]></category>
		<category><![CDATA[lawsuit]]></category>
		<category><![CDATA[Led Zeppelin]]></category>
		<category><![CDATA[Linkin Park]]></category>
		<category><![CDATA[Madonna]]></category>
		<category><![CDATA[Oracle]]></category>
		<category><![CDATA[Paul Simon]]></category>
		<category><![CDATA[qtrax]]></category>
		<category><![CDATA[Rod Stewart]]></category>
		<category><![CDATA[spiralfrog]]></category>
		<category><![CDATA[Spotify]]></category>
		<category><![CDATA[Warner Music]]></category>

		<guid isPermaLink="false">http://www.waynerosso.com/?p=1725</guid>
		<description><![CDATA[Last Wednesday a few people started tweeting that “Free and Legal Music Downloads now available from @Qtrax &#8211; Check it out: http://tinyurl.com/qtrax18”. At first most of these tweets emanated from Qtrax’s PR firm based in West Palm Beach, FL and from one of its attorneys, followed by some company insiders and acolytes. The tweet was immediately posted anonymously on an investors’ forum dedicated to Qtrax. Oddly there was no press announcement from the company or major labels. Qtrax would probably say “well this is a preview of the upcoming service”. If that’s the case, why start tweeting it and posting it in online forums? Given Qtrax’s dubious history with launches and label licenses, not to mention a considerable number of lawsuits, judgments (including an Illinois judgment entered just last week in NY Supreme Court for over $1.3 million owed but never paid to John Fife and Chicago Venture Partners) and bounced checks, I was certainly curious to see what this was all about. The service has had numerous very public false starts and unkept promises over the last 8 years or so and has reportedly burned through at least $50 million in the process with little or nothing to show [...]
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			<content:encoded><![CDATA[<div id="attachment_1731" class="wp-caption aligncenter" style="width: 585px"><a href="http://www.waynerosso.com/2011/03/07/qtrax-warner-music-something-fishy-in-the-air/"><img class="size-full wp-image-1731" title="letsgofishing" src="http://www.waynerosso.com/wp-content/uploads/2011/03/letsgofishing.jpg" alt="" width="575" height="270" /></a><p class="wp-caption-text">Let’s reel this baby in, boys. Who cares if it’s a little stinky?</p></div>
<p><span style="font-size: medium;"><span style="font-size: 14px;">Last Wednesday a few people started tweeting that “Free and Legal Music Downloads now available from @Qtrax &#8211; Check it out: </span></span>http://tinyurl.com/qtrax18<span style="font-size: 14px;">”. At first most of these tweets emanated from Qtrax’s PR firm based in West Palm Beach, FL and from one of its attorneys, followed by some company insiders and acolytes. The tweet was immediately posted anonymously on an investors’ forum dedicated to Qtrax. Oddly there was no press announcement from the company or major labels. Qtrax would probably say “well this is a preview of the upcoming service”. If that’s the case, why start tweeting it and posting it in online forums?</span></p>
<p><span style="font-size: medium;"><span style="font-size: 14px;">Given Qtrax’s <a href="http://news.cnet.com/8301-31001_3-20039439-261.html" target="_blank">dubious history</a> with launches and label licenses, not to mention a considerable number of lawsuits, judgments (including an Illinois judgment entered just last week in NY Supreme Court for over $1.3 million owed but never paid to<a href="http://iapps.courts.state.ny.us/iscroll/C_PDF?CatID=656682&amp;CID=102230-2011&amp;FName=0" target="_blank"> John Fife and Chicago Venture Partners</a>) and <a href="http://news.cnet.com/8301-1023_3-10296693-93.html" target="_blank">bounced checks</a>, I was certainly curious to see what this was all about. The service has had numerous very public false starts and unkept promises over the last 8 years or so and has reportedly burned through at least $50 million in the process with little or nothing to show for it. Even though Qtrax is a publicly traded penny stock (BLLN.PK), company CEO Allan Klepfisz has not made any public statements to shareholders since a <a href="http://qtrax.wordpress.com/2009/12/24/a-note-from-the-qtrax-team/" target="_blank">rambling paranoid blog post</a> on Christmas Eve of 2009 in which he promised that Qtrax would launch in Asia in January 2010. Evidently it’s going to launch for real today. Again. At least temporarily. Break out the champagne, boys.</span></span></p>
<p><span style="font-size: medium;"><span style="font-size: 14px;">I went onto the “preview” site and downloaded the Qtrax Silverlight player. I then searched for and downloaded more than a dozen random tracks; all tethered wma-drm’d files. I found the content to be mostly deep catalog with no current releases available. However, much to my surprise, The Beatles and AC/DC entire catalogs were displayed, with links to tracks sending a message that “download for this track is coming soon”. To the best of my knowledge, services are not allowed to even display Beatles content without their permission. No service in the world has ever been licensed AC/DC’s recorded music. Period. Has Sony given Qtrax the first rights to exploit AC/DC catalog anywhere on the internet? Is anyone at Sony even paying attention?</span></span></p>
<div id="attachment_1782" class="wp-caption aligncenter" style="width: 615px"><img class="size-full wp-image-1782" title="Beatles On Qtrax" src="http://www.waynerosso.com/wp-content/uploads/2011/03/Beatles-On-Qtrax.jpg" alt="" width="605" height="480" /><p class="wp-caption-text">Helter skelter</p></div>
<p style="text-align: auto;"><span style="font-size: medium;"><span style="font-size: 14px;"><span style="font-size: small;"><span style="font-size: 13px;"><br />
</span></span></span></span></p>
<div id="attachment_1741" class="wp-caption aligncenter" style="width: 598px"><img class="size-full wp-image-1741 " title="DC" src="http://www.waynerosso.com/wp-content/uploads/2011/03/DC.jpg" alt="" width="588" height="480" /><p class="wp-caption-text">Highway to hell, anyone?</p></div>
<p><span style="font-size: medium;"><span style="font-size: 14px;">Surprisingly the links were live for Led Zeppelin, a band who has notoriously withheld their music from many online services. I successfully downloaded a wma version of “The Song Remains The Same” from the <em>Houses of the Holy</em> album. Was Zeppelin so impressed with Qtrax that they decided to license their music to a shaky start up with old, buggy technology and a less than stellar reputation? And for Qtrax to give Zeppelin music away for free at that? Did the band never hear about the <a href="http://uk.reuters.com/article/2008/01/28/uk-qtrax-music-idUKN2844446320080128">2008 MIDEM disaster</a> where Qtrax spent well over a million dollars to celebrate their worldwide product launch, later to be humiliated when it was learned they never had signed licensing deals with the major labels? Who knows? Warner’s has repeatedly stated that they would not license to any ad-supported service. Have they changed their minds? If so, how come they&#8217;ve been so resistant to Spotify in the US? It just doesn’t make sense.</span></span></p>
<div id="attachment_1808" class="wp-caption aligncenter" style="width: 628px"><img class="size-full wp-image-1808 " title="Zeppelin" src="http://www.waynerosso.com/wp-content/uploads/2011/03/Zeppelin.tiff" alt="" width="618" height="298" /><p class="wp-caption-text">Somebody&#39;s very dazed and confused</p></div>
<p><span style="font-size: medium;"><span style="font-size: 14px;">Then I started looking for more Warner catalog and downloaded random tracks from complete albums by Madonna, Josh Groban, Linkin Park, Paul Simon, James Taylor, Fleetwood Mac, Rod Stewart, and Green Day. Industry observers I spoke with over the weekend who also checked out Qtrax had the same results, expressing surprise at the plethora of Warner catalog available on the service. I’m in the US and every Warner track I downloaded was owned or licensed in the US by WMG. Content is regularly licensed to foreign affiliates for use in their respective territories only. It&#8217;s impossible to casually explain this away as a technical glitch or some innocent misunderstanding.</span></span></p>
<p><span style="font-size: medium;"><span style="font-size: 14px;"> </span></span><span style="font-size: 14px;">I immediately started contacting the major labels and got a response first thing Thursday morning from EMI. It was the same comment that was sent the next day to <a href="http://www.billboard.biz/bbbiz/industry/digital-and-mobile/business-matters-qtrax-inks-short-term-deal-1005059952.story">news outlets</a> saying “We apparently recently completed a short term agreement with Qtrax to enable them to distribute a selection of EMI content as ad-supported streams and conditional downloads”.  (I wonder if they saw the Beatles stuff on the Qtrax site. I guess they will now.) People in the know say that’s code for “they paid us upfront so we gave them a few old titles with tight DRM to test and for probably no more than 90 days&#8221;. Sort of like a pay-as-you-go mobile phone or a debit card&#8211;no credit. Fair enough. This was the most confirmation that anyone could get from the labels. They just didn’t want to talk about it. In their defense, I can’t blame them. It’s really hard to resist a sucker. They all need the money and take it wherever and whenever they can. It’s all about the money and any other rhetoric you hear is pure BS. This sure proves it. These guys would give Charles Manson  licenses if he put up enough cash.</span></p>
<p><span style="font-size: medium;"><span style="font-size: 14px;">It sounds to me like Qtrax has somehow gotten an unsuspecting investor to front enough cash for them to give the appearance of having a real operational product in order to attract more new investors. Good luck with that. As one former Qtraxer recently told me, “Their business model is so last century”.</span></span></p>
<p><span style="font-size: medium;"><span style="font-size: 14px;">At the same time I contacted Warner Music (I’m sure they were delighted to hear from me) and asked them if they had a deal with Qtrax and specifically for Led Zeppelin tracks. They also got back to me on Thursday morning but had no comment at that time. </span></span></p>
<p><span style="font-size: medium;"><span style="font-size: 14px;">Now here’s where the story starts to get interesting. On the above-mentioned investor’s forum, a user named &#8220;speedyrush&#8221; posted the following (deleted by forum administrators shortly thereafter):</span></span></p>
<p style="padding-left: 30px;"><em><span style="font-size: medium;"><span style="font-size: 14px;">WR &lt;&#8212;&#8212; SO YOU ARE THE A$$HOLE</span></span></em></p>
<p style="padding-left: 30px;"><em><span style="font-size: medium;"><span style="font-size: 14px;">that flagged Warner and Warner woke AK [AK refers to Qtrax CEO Allan Klepfisz] up at 03:30 dark and early, only to then have to apologised to him once they realized that those particular tracks were NOT WB property. This will come back to haunt you. We were wandering who the prick was.</span></span></em></p>
<p><span style="font-size: medium;"><span style="font-size: 14px;">Yes, that’s me he’s talking about! And threatening. Young &#8220;speedyrush&#8221; must be a Qtrax insider who sleeps with Allan Klepfisz and thusly was also awakened by that 3:30 AM phone call as well (I don’t think that even the fiercely dedicated Warner staffers are working at that hour). Coincidentally, by Saturday morning the links to the Zeppelin tracks were still up but miraculously deactivated, replaced by the familiar and reassuring  “download for this track is coming soon” message.</span></span></p>
<p><span style="font-size: medium;"><span style="font-size: 14px;">Now I started to really get curious. Could it possibly be that these tracks really didn&#8217;t belong to Warner&#8217;s? No way. So I checked the files that I downloaded and found that there was no metadata attached to any of them! What the hell was this all about? </span></span></p>
<p><span style="font-size: medium;"><span style="font-size: 14px;">I spoke with several industry pros and asked them if they thought that this was unusual, and indeed it is. Anything’s possible, but this is certainly not the norm. When a service gets a label’s digital feed, identifying metadata is typically attached to each track. The Zeppelin downloads raised everyone’s eyebrows and all let out a gasp when told about The Beatles catalog being posted on the service, even with dead links. That’s a big no-no.</span></span></p>
<p><span style="font-size: medium;"><span style="font-size: 14px;">Let’s analyze what’s going on here. Either Warner Music has a deal with Qtrax or it doesn’t. If it does, then why the sudden support for the lamest ad-supported service to come along since SpiralFrog and not for a proven service like Spotify in the US? The label has licensed Spotify around the rest of the world for the past 2 years and even recently re-upped that agreement, but for some reason won&#8217;t play ball with the service in the US. After losing millions with their investment in imeem, another failed &#8220;free&#8221; music service, WMG has insisted they would no longer back  ad-supported models. </span></span></p>
<p><span style="font-size: medium;"><span style="font-size: 14px;">The bottom line is very simple. Warner Music is either being totally hypocritical (I know it’s a shocking thought) or their music is being distributed without the proper permission. </span></span></p>
<p><span style="font-size: medium;"><span style="font-size: 14px;">Well, Junior, you’ve got tiger blood and Adonis DNA. Which one is it?</span></span></p>
<p><span style="font-size: medium;"><span style="font-size: 14px;"><br />
</span></span></p>
<div id="attachment_1742" class="wp-caption aligncenter" style="width: 736px"><img class="size-full wp-image-1742   " title="Qtrax" src="http://www.waynerosso.com/wp-content/uploads/2011/03/Qtrax.jpg" alt="" width="726" height="500" /><p class="wp-caption-text">Screen shot of the Qtrax player and the tracks that were downloaded through it. Included Warner Music tracks are:  “You Can Close Your Eyes” by James Taylor from the Mudslide Slim album; “Welcome To Paradise” by Green Day; “This Old Heart of Mine” from Rod Stewart’s Atlantic Crossing; “The Song Remains The Same”, Led Zeppelin, Houses of the Holy; “My Confession” by Josh Groban; “Go Your Own Way” from Fleetwood Mac’s Rumors; “Hung Up” by Madonna; “Leave Out All the Rest” by Linkin Park; “Me And Julio Down By The Schoolyard” by Paul Simon from the Warner album Live Rhymin’.</p></div>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p><strong><span style="font-size: medium;"><span style="font-size: 14px;">UPDATE: Mar. 8, 2001, 9:39 AM EST</span></span></strong></p>
<p><span style="font-size: medium;"><span style="font-size: 14px;"><strong><span style="font-size: small;"><span style="font-size: 13px; font-weight: normal;">Within hours after posting this story, all downloaded Warner tracks were no longer playable within the Qtrax player and artist pages for The Beatles and AC/DC had disappeared from the site. When asked about this and other dead links to music files on the service, a Qtrax spokesperson would only say &#8220;Music will indeed be available upon launch&#8221;. When asked when that would be, she replied &#8220;We are in the final preparations for launch&#8221;.</span></span></strong></span></span></p>
<p><span style="font-size: medium;"><span style="font-size: 14px;"><strong><span style="font-size: small;"><span style="font-size: 13px; font-weight: normal;">Warner Music has repeatedly refused to comment.</span></span></strong></span></span></p>
<div><span style="font-size: medium;"><span style="font-size: 14px;"><br />
</span></span></div>
<p style='text-align:left'>&copy; 2011, <a href='http://www.waynerosso.com'>Wayne Rosso</a>. All rights reserved.  </p>

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		<title>Free &amp; Legal Road Kill</title>
		<link>http://www.waynerosso.com/2010/11/02/1099/</link>
		<comments>http://www.waynerosso.com/2010/11/02/1099/#comments</comments>
		<pubDate>Tue, 02 Nov 2010 12:52:45 +0000</pubDate>
		<dc:creator>Wayne Rosso</dc:creator>
				<category><![CDATA[Digital Media]]></category>
		<category><![CDATA[Stupid Marketing Ideas]]></category>
		<category><![CDATA[ad supported]]></category>
		<category><![CDATA[digital music service]]></category>
		<category><![CDATA[free all music]]></category>
		<category><![CDATA[mob]]></category>
		<category><![CDATA[mp3]]></category>
		<category><![CDATA[napster]]></category>
		<category><![CDATA[qtrax]]></category>
		<category><![CDATA[Rdio]]></category>
		<category><![CDATA[ruckus]]></category>
		<category><![CDATA[spiralfrog]]></category>
		<category><![CDATA[spottily]]></category>

		<guid isPermaLink="false">http://www.waynerosso.com/?p=1099</guid>
		<description><![CDATA[About a year ago a couple of start-ups announced their intentions to take the US by storm with a completely new take on ad-supported free mp3 downloads. Free All Music of Atlanta, Ga. claimed that they were going to give users free MP3’s by just viewing a little 15 second commercial before each download. Guvera, an Australian company, gloated about raising $30 million and how they were not going to make users suffer through any advertising but instead deliver free downloads though branded channels. These services promised to do what several others have tried and failed. And by offering the perfect antidote to online piracy they would be the saviors of the music industry. The main problem with these services is that they can’t offer the depth of catalog that would scale. Add to that the fact that they generally aren’t very hassle-free and user friendly (you can’t just create a queue of downloads and walk away, for instance) and you’ve got a pretty hard sell. Both Guvera and Free All Music have been in the US for the last 10 moths or so and their traffic stats don’t seem to offer much encouragement for ad-supported downloads. According to Wolfram [...]
<div class="twitterbutton" style="float: right; padding-left: 5px;"><a href="http://twitter.com/share?url=http://www.waynerosso.com/2010/11/02/1099/&amp;text=Free &#038; Legal Road Kill&amp;via=wrosso&amp;related=DolcePixel"><img align="right" src="http://www.waynerosso.com/wp-content/plugins//easy-twitter-button/i/buttons/en/tweetn.png" style="border: none;" alt="" /></a></div>
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			<content:encoded><![CDATA[<p><a rel="attachment wp-att-1106" href="http://www.waynerosso.com/2010/11/02/1099/roadkill/"><a href="http://www.waynerosso.com/2010/11/02/1099/"><img class="alignleft size-full wp-image-1106" title="roadkill" src="http://www.waynerosso.com/wp-content/uploads/2010/11/roadkill.jpg" alt="" width="334" height="348" /></a></a>About a year ago a couple of start-ups announced their intentions to take the US by storm with a completely new take on ad-supported free mp3 downloads. Free All Music of Atlanta, Ga. claimed that they were going to give users free MP3’s by just viewing a little 15 second commercial before each download. Guvera, an Australian company, gloated about raising $30 million and how they were not going to make users suffer through any advertising but instead deliver free downloads though branded channels. These services promised to do what several others have tried and failed. And by offering the perfect antidote to online piracy they would be the saviors of the music industry.</p>
<p>The main problem with these services is that they can’t offer the depth of catalog that would scale. Add to that the fact that they generally aren’t very hassle-free and user friendly (you can’t just create a queue of downloads and walk away, for instance) and you’ve got a pretty hard sell.</p>
<p>Both Guvera and Free All Music have been in the US for the last 10 moths or so and their traffic stats don’t seem to offer much encouragement for ad-supported downloads. According to Wolfram Alpha, Free All Music has 7600 daily visitors generating 18,000 daily page views. Not very impressive. But Guvera fares even worse with 5300 daily visitors, however those users generate about 32,000 daily page views.</p>
<p>By comparison, paid services generate significantly more traffic. Napster has 250,000 daily visitors, about the same as streaming subscription service Mog with 260,000. Both services dwarf the other new entry into the subscription streaming service space, Rdio, which lags way behind with a mere 48,000 daily visitors. Spotify, which hasn’t even launched in the US, has 950,000 daily visitors, grossly outpacing all of the others, including the ad-supported sites, <em>combined</em>. As Glenn Peoples points out in Billboard this week, Spotify’s user experience makes the difference.</p>
<p>There are so many services out there now and so many ways to get free music by download or streaming that the Guvera’s and Free All Music’s of the world have to struggle to get users. And without traffic advertisers won’t buy in. Judging from the numbers it won’t be long before they join SpiralFrog, Ruckus and Qtrax in the ad-supported music graveyard.</p>
<p>In the midst of this, Limewire continues to insist that they are determined to work with the recording industry on their new music service, Spoon, despite having fired a third of its work force in the wake of being ordered by a federal court to shut down. I don’t know if this is cynicism or sheer fantasy.</p>
<p>Either way Limewire owner Mark Gorton will have an easier time holding on to his millions than making Spoon fly.</p>
<p style='text-align:left'>&copy; 2010, <a href='http://www.waynerosso.com'>Wayne Rosso</a>. All rights reserved.  </p>

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		<title>Qtrax to Oracle: “The Dog Ate My Homework”</title>
		<link>http://www.waynerosso.com/2010/09/14/qtrax-to-oracle-%e2%80%9cthe-dog-ate-my-homework%e2%80%9d/</link>
		<comments>http://www.waynerosso.com/2010/09/14/qtrax-to-oracle-%e2%80%9cthe-dog-ate-my-homework%e2%80%9d/#comments</comments>
		<pubDate>Tue, 14 Sep 2010 12:40:34 +0000</pubDate>
		<dc:creator>Wayne Rosso</dc:creator>
				<category><![CDATA[Digital Media]]></category>
		<category><![CDATA[Music Biz]]></category>
		<category><![CDATA[Allan Klepfisz]]></category>
		<category><![CDATA[digital music service]]></category>
		<category><![CDATA[Oracle]]></category>
		<category><![CDATA[qtrax]]></category>
		<category><![CDATA[US Federal Court]]></category>

		<guid isPermaLink="false">http://www.waynerosso.com/?p=880</guid>
		<description><![CDATA[Last year database giant Oracle filed for and won a $2 million default judgment against industry laughing stock Qtrax. If you’ll recall, Qtrax bounced a $1.8 million check to Oracle. In a classic “the dog ate my homework” defense, Qtrax argues a litany of excuses as to why the judgment against them should be set aside. Last week a US Federal judge soundly rejected the Qtrax motion and ordered that the Oracle default judgment stand. You can read the judge’s decision here. She was pretty rough on our old friends at Qtrax. So now Oracle has to stand in line behind several other judgment holders and try to collect their $2 mil. This brings the total amount of outstanding judgments against Qtrax to somewhere in the neighborhood of about $4 million. Good luck collecting. &#169; 2010, Wayne Rosso. All rights reserved.
<div class="twitterbutton" style="float: right; padding-left: 5px;"><a href="http://twitter.com/share?url=http://www.waynerosso.com/2010/09/14/qtrax-to-oracle-%e2%80%9cthe-dog-ate-my-homework%e2%80%9d/&amp;text=Qtrax to Oracle: “The Dog Ate My Homework”&amp;via=wrosso&amp;related=DolcePixel"><img align="right" src="http://www.waynerosso.com/wp-content/plugins//easy-twitter-button/i/buttons/en/tweetn.png" style="border: none;" alt="" /></a></div>
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			<content:encoded><![CDATA[<p><a rel="attachment wp-att-881" href="http://www.waynerosso.com/2010/09/14/qtrax-to-oracle-%e2%80%9cthe-dog-ate-my-homework%e2%80%9d/dog_ate_my_homework_shirt/"><a href="http://www.waynerosso.com/2010/09/14/qtrax-to-oracle-%e2%80%9cthe-dog-ate-my-homework%e2%80%9d/"><img class="alignleft size-medium wp-image-881" title="dog_ate_my_homework_shirt" src="http://www.waynerosso.com/wp-content/uploads/2010/09/dog_ate_my_homework_shirt-300x266.gif" alt="" width="300" height="266" /></a></a>Last year database giant Oracle filed for and won a $2 million default judgment against industry laughing stock Qtrax. If you’ll recall, Qtrax bounced a $1.8 million check to Oracle. In a classic “the dog ate my homework” defense, Qtrax argues a litany of excuses as to why the judgment against them should be set aside.</p>
<p>Last week a US Federal judge soundly rejected the Qtrax motion and ordered that the Oracle default judgment stand. You can read the judge’s decision <a href="http://www.waynerosso.com/wp-content/uploads/2010/09/qtrax-oracle.pdf">here</a>. She was pretty rough on our old friends at Qtrax.</p>
<p>So now Oracle has to stand in line behind several other judgment holders and try to collect their $2 mil. This brings the total amount of outstanding judgments against Qtrax to somewhere in the neighborhood of about $4 million.</p>
<p>Good luck collecting.</p>
<p style='text-align:left'>&copy; 2010, <a href='http://www.waynerosso.com'>Wayne Rosso</a>. All rights reserved.  </p>

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		<item>
		<title>And You Thought That I Had Forgotten!!</title>
		<link>http://www.waynerosso.com/2009/10/06/and-you-thought-that-i-had-forgotten/</link>
		<comments>http://www.waynerosso.com/2009/10/06/and-you-thought-that-i-had-forgotten/#comments</comments>
		<pubDate>Wed, 07 Oct 2009 01:34:57 +0000</pubDate>
		<dc:creator>Wayne Rosso</dc:creator>
				<category><![CDATA[Digital Media]]></category>
		<category><![CDATA[Music Biz]]></category>
		<category><![CDATA[digital music]]></category>
		<category><![CDATA[Klepfisz]]></category>
		<category><![CDATA[lawsuit]]></category>
		<category><![CDATA[qtrax]]></category>

		<guid isPermaLink="false">http://www.waynerosso.com/?p=732</guid>
		<description><![CDATA[Yes, I&#8217;m back. Apologies for the long hiatus, but I was busy with some knucklehead who had the world convinced that he was going to buy the Pirate Bay. Oy vey. What a story. I&#8217;ll get into all of the details in the coming months. It&#8217;s one of the weirdest chapters of my extremely unconventional life. But in the meantime, check out my column in The Music Void about the latest legal woes of my hero, the Baghdad Bob of digital music, the one, the only Allen Klepshitz of Qtrax. Read about it here. &#169; 2009 &#8211; 2010, Wayne Rosso. All rights reserved.
<div class="twitterbutton" style="float: right; padding-left: 5px;"><a href="http://twitter.com/share?url=http://www.waynerosso.com/2009/10/06/and-you-thought-that-i-had-forgotten/&amp;text=And You Thought That I Had Forgotten!!&amp;via=wrosso&amp;related=DolcePixel"><img align="right" src="http://www.waynerosso.com/wp-content/plugins//easy-twitter-button/i/buttons/en/tweetn.png" style="border: none;" alt="" /></a></div>
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			<content:encoded><![CDATA[<div id="attachment_749" class="wp-caption alignleft" style="width: 237px"><a href="http://www.waynerosso.com/2009/10/06/and-you-thought-that-i-had-forgotten/"><img class="size-medium wp-image-749" title="Qtrax Judgment" src="http://www.waynerosso.com/wp-content/uploads/2009/10/Qtrax-Judgment-227x300.jpg" alt="Hey Guys, Don't Take Their Check!" width="227" height="300" /></a><p class="wp-caption-text">Hey Guys, Don&#39;t Take Their Check!</p></div>
<p>Yes, I&#8217;m back. Apologies for the long hiatus, but I was busy with some knucklehead who had the world convinced that he was going to buy the Pirate Bay. Oy vey. What a story.</p>
<p>I&#8217;ll get into all of the details in the coming months. It&#8217;s one of the weirdest chapters of my extremely unconventional life.</p>
<p>But in the meantime, check out my column in <a href="http://www.themusicvoid.com/2009/10/update-from-our-rubber-check-department/" target="_blank">The Music Void</a> about the latest legal woes of my hero, the Baghdad Bob of digital music, the one, the only Allen Klepshitz of Qtrax. <a href="http://www.themusicvoid.com/2009/10/update-from-our-rubber-check-department/" target="_blank">Read about it here.</a></p>
<p style='text-align:left'>&copy; 2009 &#8211; 2010, <a href='http://www.waynerosso.com'>Wayne Rosso</a>. All rights reserved.  </p>

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		<item>
		<title>Welcome To Hong Kong</title>
		<link>http://www.waynerosso.com/2009/06/04/welcome-to-hong-kong/</link>
		<comments>http://www.waynerosso.com/2009/06/04/welcome-to-hong-kong/#comments</comments>
		<pubDate>Thu, 04 Jun 2009 18:48:57 +0000</pubDate>
		<dc:creator>Wayne Rosso</dc:creator>
				<category><![CDATA[Digital Media]]></category>
		<category><![CDATA[digital music]]></category>
		<category><![CDATA[Klepfisz]]></category>
		<category><![CDATA[lawsuit]]></category>
		<category><![CDATA[qtrax]]></category>

		<guid isPermaLink="false">http://www.waynerosso.com/?p=546</guid>
		<description><![CDATA[You&#8217;re looking at one of the finest hotels in the world, The Langham Place Hotel in Hong Kong. According to the hotel web site: Among 5-star Hong Kong hotels, Langham Place Hotel Hong Kong is unique… Langham Place captures the vibrancy and buzz of local culture like no other. And presents it in a way that’s invigorating, engaging, fun! You’ll feel refreshed and inspired as soon as you step inside. You’ll also find every conceivable modern indulgence, including our luxury Chuan Spa. Langham Place Hotel Hong Kong – the place to be in Hong Kong! Sounds great, no? And looks pretty nice, as you can see from this link to a little photographic tour of the hotel. Now why in God&#8217;s name would anyone care about this beautiful hotel in Hong Kong? No one really. Except our man Honest Al Klepshitz who has been holed up there all week, dropping in on this site at least 40 times thus far. And it&#8217;s only Thursday. Welcome back, Honest Al. UPDATE: 49 UPDATE: 43 UPDATE: 41 &#169; 2009, Wayne Rosso. All rights reserved.
<div class="twitterbutton" style="float: right; padding-left: 5px;"><a href="http://twitter.com/share?url=http://www.waynerosso.com/2009/06/04/welcome-to-hong-kong/&amp;text=Welcome To Hong Kong&amp;via=wrosso&amp;related=DolcePixel"><img align="right" src="http://www.waynerosso.com/wp-content/plugins//easy-twitter-button/i/buttons/en/tweetn.png" style="border: none;" alt="" /></a></div>
]]></description>
			<content:encoded><![CDATA[<p><a href="http://www.waynerosso.com/2009/06/04/welcome-to-hong-kong/"><img class="alignleft size-medium wp-image-547" title="original-1" src="http://www.waynerosso.com/wp-content/uploads/2009/06/original-1-300x235.jpg" alt="original-1" width="300" height="235" /></a>You&#8217;re looking at one of the finest hotels in the world, The Langham Place Hotel in Hong Kong. According to the hotel web site:</p>
<p style="padding-left: 30px;"><em>Among 5-star Hong Kong hotels, Langham Place Hotel Hong Kong is unique…</em></p>
<p style="padding-left: 30px;"><em>Langham Place captures the vibrancy and buzz of local culture like no other. And presents it in a way that’s invigorating, engaging, fun! You’ll feel refreshed and inspired as soon as you step inside. You’ll also find every conceivable modern indulgence, including our luxury Chuan Spa. </em></p>
<p style="padding-left: 30px;"><em>Langham Place Hotel Hong Kong – the place to be in Hong Kong!</em></p>
<p>Sounds great, no? And looks pretty nice, as you can see from this <a href="http://hongkong.langhamplacehotels.com/en/photos/photo_gallery_exteriors.htm" target="_blank">link to a little photographic tour of the hotel</a>. Now why in God&#8217;s name would anyone care about this beautiful hotel in Hong Kong? No one really. Except our man Honest Al Klepshitz who has been holed up there all week, dropping in on this site at least 40 times thus far. And it&#8217;s only Thursday.</p>
<p>Welcome back, Honest Al.</p>
<p>UPDATE: 49</p>
<p>UPDATE: 43</p>
<p>UPDATE: 41</p>
<p style='text-align:left'>&copy; 2009, <a href='http://www.waynerosso.com'>Wayne Rosso</a>. All rights reserved.  </p>

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		</item>
		<item>
		<title>UPDATE: Qtrax Correction. Sort Of.</title>
		<link>http://www.waynerosso.com/2009/05/28/update-qtrax-correction-sort-of/</link>
		<comments>http://www.waynerosso.com/2009/05/28/update-qtrax-correction-sort-of/#comments</comments>
		<pubDate>Thu, 28 May 2009 19:18:03 +0000</pubDate>
		<dc:creator>Wayne Rosso</dc:creator>
				<category><![CDATA[Digital Media]]></category>
		<category><![CDATA[digital music]]></category>
		<category><![CDATA[Klepfisz]]></category>
		<category><![CDATA[lawsuit]]></category>
		<category><![CDATA[qtrax]]></category>

		<guid isPermaLink="false">http://www.waynerosso.com/?p=419</guid>
		<description><![CDATA[You may have read my previous post about Qtrax and their multiple legal woes and gnarly &#8220;loans&#8221; that seemt o have come back to bite them on the ass big time. In that post I wrote &#8220;Mr. Klepshitz took a default judgment on April 20, 2009 totaling  more than  $516,000 including interest in the NY Supreme Court case #603243/08, Alpha Capital Anstalt and Osher Capital, Inc v. Brilliant Technologies Corporation and LTD Network, Inc. For those of you who don&#8217;t get it, it means that Klepshitz didn&#8217;t bother showing up in court or filing any responses to the claim.&#8221; Well I got a call from a very important West Coast entertainment industry attorney bitterly reprimanding me for the previous statement. He pointed out that the judgment that I cited was NOT a default judgment, but a summary judgment. The difference is that the judge in the matter gave the plaintiff a judgment based on the facts of the case. But what is most interesting is that this particular case as well as the newly files case by Millennium Technologies and yet another case seem to establish a pattern of how Allen Klepshitz &#8220;settles&#8221; these matters. Two words: rubber checks. In the Alpha/Osher case, he had [...]
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			<content:encoded><![CDATA[<p><a href="http://www.waynerosso.com/2009/05/28/update-qtrax-correction-sort-of/"><img class="alignleft size-full wp-image-424" title="bounced_check-300x225" src="http://www.waynerosso.com/wp-content/uploads/2009/05/bounced_check-300x225.jpg" alt="bounced_check-300x225" width="300" height="225" /></a>You may have read my previous post about Qtrax and their multiple legal woes and gnarly &#8220;loans&#8221; that seemt o have come back to bite them on the ass big time. In that post I wrote &#8220;Mr. Klepshitz took a default judgment on April 20, 2009 totaling  more than  $516,000 including interest in the NY Supreme Court case #603243/08, Alpha Capital Anstalt and Osher Capital, Inc v. Brilliant Technologies Corporation and LTD Network, Inc. For those of you who don&#8217;t get it, it means that Klepshitz didn&#8217;t bother showing up in court or filing any responses to the claim.&#8221; Well I got a call from a very important West Coast entertainment industry attorney bitterly reprimanding me for the previous statement. He pointed out that the judgment that I cited was NOT a default judgment, but a summary judgment. The difference is that the judge in the matter gave the plaintiff a judgment based on the facts of the case.</p>
<p>But what is most interesting is that this particular case as well as the newly files case by Millennium Technologies and yet another case seem to establish a pattern of how Allen Klepshitz &#8220;settles&#8221; these matters. Two words: rubber checks. In the Alpha/Osher case, he had settled the claims at the last minute after dragging the case on for years. He gave the plaintiffs 2 post dated checks for $250,000 as settlement. But both checks bounced! So this latest judgment is a result of the plaintiffs new case to collect on the rubber that Klepshitz gave them. Are you following?</p>
<p>So as we see in the Millennium case, he bounced yet another check on them. But let me introduce to you a gentleman by the name of Peter Goerke. Mr. Goerke also sued Klepshitz and the case was evidently settled. Klepshitz paid Goerke with 2 checks, one for $88,900 and another for $12,700. And guess what? Both checks bounced. So Goerke had to file yet <a href="http://www.docstoc.com/docs/6513007/?key=Y2FhN2ExMDgt&amp;pass=ZGFiOS00YTY3" target="_blank">another suit</a>, to which he was awarded a<a href="http://www.docstoc.com/docs/6513006/?key=MjQ5NDkyNWUt&amp;pass=NWFkMC00Zjdm" target="_blank"> summary judgment</a>, in order to collect on the bad checks. Not only that, but when Goerke got his summary judgment, Klepfisz had to be threatened with <a href="http://www.docstoc.com/docs/6513009/?key=ZDBkM2M4MWMt&amp;pass=ZGM0ZC00YmUx" target="_blank">contempt of court</a> in order to get him to pay up!</p>
<p>Is this man a serial check bouncer? You tell me. But one thing is for sure: if Kelpshitz owes you money, get it in cash and still make sure its real!</p>
<p style='text-align:left'>&copy; 2009, <a href='http://www.waynerosso.com'>Wayne Rosso</a>. All rights reserved.  </p>

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		<title>Would You Buy A Used Car From This Man? If So, Honest Al Has a Deal For You</title>
		<link>http://www.waynerosso.com/2009/05/21/would-you-buy-a-used-car-from-this-man-if-so-honest-al-has-a-deal-for-you/</link>
		<comments>http://www.waynerosso.com/2009/05/21/would-you-buy-a-used-car-from-this-man-if-so-honest-al-has-a-deal-for-you/#comments</comments>
		<pubDate>Thu, 21 May 2009 19:29:04 +0000</pubDate>
		<dc:creator>Wayne Rosso</dc:creator>
				<category><![CDATA[Digital Media]]></category>
		<category><![CDATA[digital music]]></category>
		<category><![CDATA[Klepfisz]]></category>
		<category><![CDATA[lawsuit]]></category>
		<category><![CDATA[qtrax]]></category>

		<guid isPermaLink="false">http://www.waynerosso.com/?p=358</guid>
		<description><![CDATA[UPDATE: Our man Al Klepshitz must not be doing that badly after all. In spite of all of the judgments and outstanding claims against Brilliant Technologies, Qtrax and or Klepshitz personally, he was seen not long ago in the First Class section of a Singapore Airlines flight (Klepshitz is know to have a great affinity and passion for the airline&#8217;s first class service). Klepshitz was last know to be hanging out in Australia. For the record, a roundtrip first class ticket on Singapore Air from JFL to Sydney is nearly $18,000. So what&#8217;s next? Well the good news is that we can rest assured that Klepshitz won&#8217;t be looking for some of those government TARP bailout funds as the government is pretty much demanding that CEO&#8217;s of bailout companies fly coach. Yesterday there was a very interesting post in comment to the April 14 story on The Music Void titled &#8220;Qtrax Relaunching? What About all the Lawsuits it is Facing? TMV Drills Down on Qtrax&#8221;. The poster, named Jessica, is responding to comments made on the site by Robin Kent, an advisor to Qtrax, and a couple of other posters named Frank and Rod. I must admit, Jessica nailed it. [...]
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			<content:encoded><![CDATA[<div id="attachment_159" class="wp-caption alignleft" style="width: 202px"><a href="http://www.waynerosso.com/2009/05/21/would-you-buy-a-used-car-from-this-man-if-so-honest-al-has-a-deal-for-you/"><img class="size-full wp-image-159" title="allan" src="http://www.waynerosso.com/wp-content/uploads/2009/04/allan.jpg" alt="Qtrax CEO Allan Klepshitz, according to Qtrax &quot;advisor&quot; Robin Kent, &quot;is one of the most honest people I have ever met&quot;." width="192" height="250" /></a><p class="wp-caption-text">Qtrax CEO Allan Klepshitz, according to Qtrax &quot;advisor&quot; Robin Kent, &quot;is one of the most honest people I have ever met&quot;.</p></div>
<p>UPDATE: Our man Al Klepshitz must not be doing that badly after all. In spite of all of the judgments and outstanding claims against Brilliant Technologies, Qtrax and or Klepshitz personally, he was seen not long ago in the First Class section of a Singapore Airlines flight (Klepshitz is know to have a great affinity and passion for the airline&#8217;s first class service). Klepshitz was last know to be hanging out in Australia. For the record, a roundtrip first class ticket on Singapore Air from JFL to Sydney is nearly $18,000. So what&#8217;s next? Well the good news is that we can rest assured that Klepshitz won&#8217;t be looking for some of those government TARP bailout funds as the government is pretty much demanding that CEO&#8217;s of bailout companies fly coach.</p>
<p>Yesterday there was a very interesting post in comment to the April 14 story on The Music Void titled<a href="http://www.themusicvoid.com/?p=353" target="_blank"> &#8220;Qtrax Relaunching? What About all the Lawsuits it is Facing? TMV Drills Down on Qtrax&#8221;</a>. The poster, named Jessica, is responding to comments made on the site by Robin Kent, an advisor to Qtrax, and a couple of other posters named Frank and Rod. I must admit, Jessica nailed it.</p>
<p style="padding-left: 30px;"><em>@Rod: I don’t think anyone is blaming Robin. As a matter of fact, there is no mention of anyone blaming Robin anywhere on here, other than your accusation.</em></p>
<p style="padding-left: 30px;"><em>@Frank: I agree that this blog is painting a negative picture of Qtrax, however, that is the reality of the situation. The lawsuits speak for themselves; (I’d suggest you read the information provided by Jakomi pertaining to the lawsuits.) Furthermore, Qtrax on countless occasions has made public promises related to their product only to recant them days, weeks, months later. Here’s a company who made a very public launch in 2008, only to have announced hours later, that in fact, they never had any deals with the four major record labels. Then finally, once they managed to get a product together, they announced a version compatible for Macs coming in March 2008. It’s now May 2009 and there is still no Mac compatible version. Anyone with any technical knowledge would know they could never deliver on such a promise because Qtrax is locked into Windows Digital Rights Management for protecting their songs, and Windows DRM is not compatible with Macs at all. Then in 2009, they announced they would provide portability for their songs at last saying April 2009, only to now push that date back to May 2009 (which is quickly coming to a close with no portability in sight). They’ve also promised launches in other countries, and so far, they haven’t lived up to that promise either.</em></p>
<p style="padding-left: 30px;"><em>Funny thing is, I haven’t gotten to explaining the obvious flaws with the technical aspects of their product yet. The most likely deal breaker for anyone comes from the fact Qtrax makes use of Windows DRM to protect their songs. Thus, even if they ever enabled portability, you could only transfer the songs to Windows DRM compatible devices, which right there, excludes the iPod and Microsoft’s own Zune. As a result, they’re now catering to a niche market that is ever shrinking as Apple and Microsoft’s share is growing. If they ever wanted to be compatible with the iPod or Zune, either they would need to change or eliminate their DRM (like most of the major digital music services are now doing) or their customers would have to violate the Digital Millennium Copyright Act to remove the DRM from their files. Also, should Qtrax ever go out of business (like in the cases of SpiralFrog, Ruckus, MSN Music, etc.), their loyal customers would no longer be able to play the songs they downloaded since Windows DRM requires a license check every couple of days. As a result, their vast music collection is quickly wiped out with no recourse except to once again violate the DMCA to remove the DRM.</em></p>
<p style="padding-left: 30px;"><em>Lastly, from a business perspective, the core premise of Qtrax trying to appeal to illegal filesharers is flawed. As savvy minded individual, why would an illegal filesharer give up downloading songs for free, a method that doesn’t involve watching advertisements, doesn’t restrict how, when, or where they can use the songs, for DRM-laden versions of them which have many Draconian restrictions? It’s just madness if they think they’ll ever make in-roads into that market ever, especially since all of their predecessors haven’t been able to any great extent. Also, they are cheap alternatives, like iTunes and AmazonMP3, which provide the same library of songs but without any of the Draconian restrictions.</em></p>
<p style="padding-left: 30px;"><em>Sorry to burst anyone’s bubble here, there’s a reason Qtrax/BLLN is still a penny stock, valued at roughly 2 cents. It’s just not a viable business or product in its current form, and without any significant innovation to try to address these issues, I wouldn’t be surprised in the slightest if it joined the ranks of the defunct SpiralFrog, Ruckus, and MSN Music, in the very near future.</em></p>
<p>What Jessica, and many others for that matter, is not aware of is that Brilliant Technologies (the owner of Qtrax) and CEO Allan Klepshitz have had a few more minor issues pop up since April 14. First of all, looks like Mr. Klepshitz took a default judgment on April 20, 2009 totaling  more than  $516,000 including interest in the NY Supreme Court case #603243/08, Alpha Capital Anstalt and Osher Capital, Inc v. Brilliant Technologies Corporation and LTD Network, Inc. For those of you who don&#8217;t get it, it means that Klepshitz didn&#8217;t bother showing up in court or filing any responses to the claim. For your reading pleasure, <a href="http://www.docstoc.com/docs/document-preview.aspx?doc_id=6216623&amp;key=MTY0ZThhMmEt&amp;pass=NWFkZi00M2Zl" target="_blank">you can download the judgement here</a>.</p>
<p>But that&#8217;s only the beginning. Klepshitz took another default judgment in Maricopa County, Arizona a few weeks ago as well. This time for about $250,000. Plus I understand that yet another $1 million suit was filed against Brilliant in US Federal Court in late April. So now we&#8217;re at about $750,000 in default judgments and counting. The new federal suit, plus several other complaints still in the pipeline. <a href="http://www.waynerosso.com/?p=13" target="_blank">I&#8217;ve found many in New York State alone</a> and God knows what else is out there in New Jersey, Connecticut and California. But there&#8217;s more.</p>
<p>Now here is some interesting new reading. On April 16 a lawsuit was filed in NY Supreme Court titled MILLENNIUM INFORMATION TECHNOLOGIES v. QTRAX a/k/a QTRAX, INC., LTD NETWORK, INC., BRILLIANT TECHNOLOGIES CORPORATION, and ALAN KLEPFISZ. Millennium claims that they were hired by Qtrax in December of 2007 provide services to the defendant for &#8220;the initial implementation of Oracle RAC Software to launch the defendant‘s music download site&#8221; Qtrax. Then  on January 04, 2008, &#8220;Brilliant Technologies retained the services of the Plaintiff to complete a Storage Configuration project at California, as the defendant’s previous contractor was unable to get the infrastructure ready. The Plaintiff sent their engineering team to California to implement the project pertaining to Storage Configuration, and the project was duly completed by the Plaintiff. Further work in relation to the final stages of the Oracle RAC Implementation project was possible only on the completion of the &#8216;Storage Configuration project&#8217; that the Defendants had been in the process of executing&#8221;.</p>
<p>Don&#8217;t fall asleep. It gets better. On Jan 15, the Millennium guys then have to send some techies to London to implement the project and supply 24/7 web site support. Now what&#8217;s really interesting is the timing of all of this. If you&#8217;ll recall, it was last January, 2008, at MIDEM in Cannes when Klepshitz spent over a million dollars to &#8220;launch&#8221; Qtrax, announcing to the international media (and making monkeys of same media) that Qtrax would launch the next day with licenses from all 4 major labels. Of course it didn&#8217;t even take 24 hours for each label to publicly state that they did not have deals with Qtrax. Thus we were given the greatest launch fuck up in history. So it looks as though Klepshitz got a bunch of money in to pay for his big MIDEM launch party and had to scramble to meet his deadline as he had nothing to launch. So he hired Millennium for a bunch of money so that he would have a software client that he could presumably go live with.</p>
<p>OK. So now it&#8217;s Feb. 1, 2008 and the MIDEM fiasco has passed. Millennium sent Klepshitz a bill for $26,250. Klepshitz issues a check. The check bounces! More invoices go to Qtrax. More promises to pay. Millennium collects about $85,000 of their invoices over a four month period, but that doesn&#8217;t cover even half of the outstanding invoices. After a while Millennium claims that calls to Klepshitz and his attorneys go unanswered so they finally file suit for $147,634.72 plus 9.9% interest and attorney fees. Could it be that Klepshitz blew his wad on his big MIDEM prom and decided to stiff his technology guys? Once again, for your reading pleasure, <a href="http://www.docstoc.com/docs/document-preview.aspx?doc_id=6216628&amp;key=ZWZiZWFmNjUt&amp;pass=NGEzMi00MDcy" target="_blank">you can download a copy of the complaint here</a>.</p>
<p>And poor Robin Kent. Robin had commented on the above mentioned The Music Void post that &#8220;&#8230; I’m an advisor to Qtrax, but I have to defend the founder. He is one of the most honest people I have ever met and smartest.&#8221; Robin, I would consider walking that back a bit. But you surely have to give Klepshitz credit for one thing: he has one big set of balls.</p>
<p style='text-align:left'>&copy; 2009, <a href='http://www.waynerosso.com'>Wayne Rosso</a>. All rights reserved.  </p>

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		<title>Is This Man The Next Steve Jobs?</title>
		<link>http://www.waynerosso.com/2009/04/14/is-this-man-the-next-steve-jobs/</link>
		<comments>http://www.waynerosso.com/2009/04/14/is-this-man-the-next-steve-jobs/#comments</comments>
		<pubDate>Tue, 14 Apr 2009 18:35:37 +0000</pubDate>
		<dc:creator>Wayne Rosso</dc:creator>
				<category><![CDATA[Digital Media]]></category>
		<category><![CDATA[Music Biz]]></category>
		<category><![CDATA[digital music]]></category>
		<category><![CDATA[Klepfisz]]></category>
		<category><![CDATA[lawsuit]]></category>
		<category><![CDATA[qtrax]]></category>

		<guid isPermaLink="false">http://feacd1d3-c42a-4713-8ec2-7fac5a46905a</guid>
		<description><![CDATA[Not! As you could see from my post last week about Qtrax, you’d have to think twice about lending him your car. Yes, it’s Qtrax CEO Allan Klepshitz. And how is the new Qtrax user experience? Does it equal or top that of iTunes? Is Kelpshitz the digital music genius he would have us all believe? Mike Barthel of idolator.com details his user experience with the new and improved Qtrax. Check it out. If you’ve tried out the new and improved Qtrax, tell us about your experience in the comments section below. &#169; 2009, Wayne Rosso. All rights reserved.
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			<content:encoded><![CDATA[<div id="attachment_159" class="wp-caption alignleft" style="width: 202px"><a href="http://www.waynerosso.com/2009/04/14/is-this-man-the-next-steve-jobs/"><img class="size-full wp-image-159" title="allan" src="http://sc6.6z6.com/~wrosso/wp-content/uploads/2009/04/allan.jpg" alt="Qtrax CEO Allan Klepshitz" width="192" height="250" /></a><p class="wp-caption-text">Qtrax CEO Allan Klepshitz</p></div>
<p>Not! As you could see from <a href="Entries/2009/4/9_Another_Lame_Qtrax_Launch.html">my post last week about Qtrax</a>, you’d have to think twice about lending him your car. Yes, it’s Qtrax CEO Allan Klepshitz. And how is the new Qtrax user experience? Does it equal or top that of iTunes? Is Kelpshitz the digital music genius he would have us all believe? <a href="http://idolator.com/5206994/qtrax-more-frustrating-than-qbert">Mike Barthel of idolator.com</a> details his user experience with the new and improved Qtrax. <a href="http://idolator.com/5206994/qtrax-more-frustrating-than-qbert">Check it out</a>.</p>
<p>If you’ve tried out the new and improved Qtrax, tell us about your experience in the comments section below.</p>
<p style='text-align:left'>&copy; 2009, <a href='http://www.waynerosso.com'>Wayne Rosso</a>. All rights reserved.  </p>

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