Digital Music News: Is Snocap Melting?

Adding a Snocap store to my MySpace page was on my to-do list for a while. As usual, I took a "wait and see" approach to dealing with the iTunes rival--in other words, I procrastinated. Now it appears I may have saved myself a headache.

On October 11, reports emerged that San Francisco-based Snocap, a music-licensing company cofounded in 2002 by Napster's Shawn Fanning, laid off 31 of its 57 employees and tacked a for-sale sign on the door (figuratively speaking). Speculation is rampant that a failed deal with online retailer CD Baby (aka savior to indie musicians everywhere) was a major factor. CD Baby had announced in February 2007 that it would facilitate Snocap stores for its artist clients and offer them a higher per-song payment than those who went directly through MySpace, with which Snocap also has a profit-sharing agreement. But there were multiple complications, duplicate accounts, few payments to clients and no customer service from Snocap over the next few months. In September, CD Baby announced that the deal was dead. Now, many artists are having trouble removing the stores; others have reported the stores simply appearing uninvited on their spaces.

And were artists making any money? Not significantly, according to posts I've read on various newsgroups to which I belong. One person claimed no payouts for five months, while many noted that their iTunes sales are far more robust. I think this missive to an artist forum on CDBaby sums it up pretty well.

"Can anyone remember Mp3.com before they sold us all out? The $30.00 annual Snocap fee on its own is certainly a lot of cash for little known artists that rarely sell digital downloads anyway, artists can sell downloads via the Paypal shopping cart by pasting Paypal buy links into their Myspace page. The other question is the very hefty FIFTY SIX (56) percent cut for Myspace, Snocap and Paypal.
Apple Itunes only keeps like thirty three (33) percent and CDbaby.com only takes an additional NINE (9) percent cut of total income. leaving artists with about FIFTY EIGHT (58) percent. I totally trust in the direction [CD Baby founder] Derek Sivers is going with CDbaby.com, and at the moment he is completely walking away from Snocap. We all have seen many of these music download companies come and go, most of these defunct companies had questionable business models. ...
Derek Sivers is the man, remember that folks!"

Sivers promised to reveal more about the increasingly acrimonious divorce from Snocap in an October 1 post to his forum: "I'll give a public and detailed account soon. For now, just know that the ending of the relationship between CD Baby and Snocap was our idea, and done for your benefit (as well as our sanity)."