The No.1 Website for Pro Audio
 All  This Thread  Reviews  Gear Database  Gear for sale     Latest  Trending
Music Dealers Liqudation
Old 24th July 2016
  #1
Gear Nut
 

Music Dealers Liqudation

Late Sunday Rumor News on Music Dealers losing Coke deal and Liquidation. Files Bankruptcy.

Twitter page is now done >> https://twitter.com/MusicDealers

Facebook is now done >> https://www.facebook.com/musicdealers/
Old 24th July 2016
  #2
Lives for gear
 
spiderman's Avatar
Their website is still up. But if this were true... Honestly not surprised.... They had some big accounts/placements over the years, but they also seemed to be living larger than their portfolio (nice downtown Chicago offices, a dozen full-time employees, etc). C'est la vie.

Would not surprise me at all if the founders spin out a new company in the near future. Leaner, different, etc.
Old 24th July 2016
  #3
Gear Nut
 

He already announced his new company. “Notice Of Assignment For The Benefit Of Creditors.” have been sent.
Composer/artist are showing they are recieving them.
https://www.desirelist.com/ is the new company. Non-music related.
Eric was just on Sync Summit's panel this June promoting his new book.

Eric's linkedin update now shows Music Dealers was over in 2015
https://www.linkedin.com/in/ericsheinkop
https://twitter.com/ESheinkop


Notice Of Assignment For The Benefit Of Creditors is an Alternative to Business Bankruptcy.
Going this route is also usually faster and more private (and less embarrassing) than a bankruptcy.

When you go out of business, you often have a mountain of debt any many known and unknown creditors to pay. Especially if the business doesn't ahve eough money or assets to cover these liabilities, it can be a daunting task trying to negotiate settlements with your creditors and liquidate the business yourself. While some business owners choose bankruptcy in these circumstances, opting for the bankruptcy trustee to liquidate assets and pay off debts, there is a third choice.

What Is an Assignment for Benefit of Creditors

The third alternative to liquidating your own business or filing for bankruptcy is to follow a procedure called an "assignment for the benefit of creditors," or ABC. Here you work with one of the many ABC companies or law firms that specialize in liquidating insolvent businesses. Basically, the ABC company will liquidate your assets and pay off your creditors (for a percentage of what it is able to sell your assets for), while you and your co-owners move forward with your lives.

This option generally works well if your business is a corporation or LLC with a lot of debts and assets. A large liquidation can take months or years to wind up—something you probably can't afford to spend your time doing—so it makes it worth selling your assets to a third party in one fell swoop.

How Does Assignment for Benefit of Creditors Work?

Your business assigns (transfers) all of its assets and debts to the ABC company or law firm, meaning that liability for the business's debts moves to the ABC company or firm. You might still be liable for debts with personal guarantees (or all debts if you are a sole proprietor or partner), however, so you want to discuss with the ABC company paying these debts first.
Old 25th July 2016
  #4
Lives for gear
 
spiderman's Avatar
Depending on how his contracts were setup with composers, could this be a reassignment of all publishing rights to another company? (especially on exclusive rights negotiations) I believe that unless the terms were written into the contract that specifies the music publishing as "non-asset" or "reversion on corporate failure", these people may find their music in the hands of even less desirable managers.

Seems like more reason for musicians to be MORE careful who they do business with and LESS willing to enter into agreements without some protections for the rights of their work.
Old 25th July 2016
  #5
Gear Nut
 

Companies go out of business for a number of reasons. As time goes by, I'm sure more information will come out.
To see digusting music supervisors doing twitter high 5's over Eric's loss is not fair, its just sickening.

https://postimg.org/image/kbt7yhr29/

Another reason why this sync business needs a major overhaul of personnel. The guy you make fun of today , can still be on top tommorrow. Whoever this ( Fauxmusicsupe) person/persons that slanders companies and names to the general public, you will be found out and when your day of reckoning comes it will be not be pretty. The hate you spill out to others , comes back twice to you. I seen this happen over and over again.

According to the letter sent out, they are still trying to make good on any outstanding fees due to composers and artists.
Old 25th July 2016
  #6
Gear Maniac
 

Quote:
Originally Posted by watchmanmusic View Post
Companies go out of business for a number of reasons. As time goes by, I'm sure more information will come out.
To see digusting music supervisors doing twitter high 5's over Eric's loss is not fair, its just sickening.

https://postimg.org/image/kbt7yhr29/

Another reason why this sync business needs a major overhaul of personnel. The guy you make fun of today , can still be on top tommorrow. Whoever this ( Fauxmusicsupe) person/persons that slanders companies and names to the general public, you will be found out and when your day of reckoning comes it will be not be pretty. The hate you spill out to others , comes back twice to you. I seen this happen over and over again.

According to the letter sent out, they are still trying to make good on any outstanding fees due to composers and artists.
They're right though. Music Dealers was just devaluing the industry, along with a bunch of other companies.
Old 25th July 2016
  #7
Lives for gear
 
spiderman's Avatar
I'll agree that it's not professional or even basic human decency to make fun of someone in hardship (welcome to the Internet). I feel bad for Erik and the MD crew... but their reputation among us experienced in music licensing was not very positive. I was with them from the beginning (only put in three songs to test the water) and quickly realized that I didn't want to do business with this model. Worse... despite having a clause in the contract that allowed me to remove my music, it was never possible. I tried a few times to have these songs removed from their catalog and ALWAYS got the run around. "Oh we just sent that demo to a client and we can't release it until that contract is over" or similar BS. Never a decent placement from them.

Bottom line... Erik lived PHAT for years off of MD. Many musicians didn't do as well from those placements. I'm not happy his person is in a difficult position... but I have no problem seeing MD disappear.
Old 25th July 2016
  #8
Gear Nut
 

That is understood. i have heard similar stories as well.

But I have also heard of stories of great placements throughout their time too for indie bands. I believe between 2011-2013 they were doing really well for indie bands, not focused on composers as much. A few bands I knew, who would remove their music from them all the time with no problem, but i am sure everyone's story is different and I will not discount anyones.

There are lessons to be learned here as more stories/ experiences are shared
Old 26th July 2016
  #9
I have a feeling we will be seeing more bankruptcy filings for more libraries in the next few years.

I've been saying this for a long time... when there is a race to the bottom, turn around and sprint to the top...

cutting prices over and over only does one thing... it drives you into bankruptcy. It's not a sustainable business model.
Old 26th July 2016
  #10
Lives for gear
 
Jeff Hayat's Avatar
 

Quote:
Originally Posted by Etch-A-Sketch View Post
I have a feeling we will be seeing more bankruptcy filings for more libraries in the next few years.
Although I do not wish hardship on anyone (been there myself), this might not be a bad thing for the industry.
Old 26th July 2016
  #11
Lives for gear
 
Jeff Hayat's Avatar
 

Quote:
Originally Posted by spiderman View Post
I'll agree that it's not professional or even basic human decency to make fun of someone in hardship (welcome to the Internet).
Agreed.

They may have helped devalue the industry, but unless they have royally screwed you personally, it is not cool to take to the internet to defame someone, while cowering behind your keyboard and monitor.

Cheers.
Old 26th July 2016
  #12
Quote:
Originally Posted by Jeff Hayat View Post
Agreed.

They may have helped devalue the industry, but unless they have royally screwed you personally, it is not cool to take to the internet to defame someone, while cowering behind your keyboard and monitor.

Cheers.
I wouldn't say that.
Old 26th July 2016
  #13
Lives for gear
 
spiderman's Avatar
Well... if there was any doubt, I received a letter from their lawyer today. It addresses nothing specific about our agreement/contract. It also includes a form to claim amounts owed.

I suspect there are A LOT of composers who are owed money, and they aren't going to get paid. What's going to happen, is that only those who can claim an amount owed will be added to the creditors list... and then they will get a relative percentage of the liquidation (pennies). I did a custom score and sound design for a theater company once.... they filed bankrupt and I was paid $23 for that week's worth of work. Same thing will happen with this bankruptcy.

The question remains though.... are the publishing agreements being reassigned to the "ASSIGNEE" in this bankruptcy?
Old 26th July 2016
  #14
Quote:
Originally Posted by spiderman View Post
The question remains though.... are the publishing agreements being reassigned to the "ASSIGNEE" in this bankruptcy?
All composers should have the chance to get their music back free and clear since they aren't going to get any money. I hate seeing composers get cheated like this.

Music Dealers rode on a high horse while taking advantage of composers for years. I say good riddance as well.
Old 26th July 2016
  #15
Lives for gear
 
Jeff Hayat's Avatar
 

Quote:
Originally Posted by spiderman View Post
are the publishing agreements being reassigned to the "ASSIGNEE" in this bankruptcy?
Do you have your contract handy? If so, take a look at it, and see what, if anything it says on the matter.
Old 26th July 2016
  #16
Gear Guru
 
drBill's Avatar
If you have music assigned exclusively to them, that music will not be returned to you. It will be sold as an asset of the company. You might be able to buy back your copyrights though....
Old 26th July 2016
  #17
Gear Nut
 

Quote:
Originally Posted by Desire Inspires View Post
All composers should have the chance to get their music back free and clear since they aren't going to get any money. I hate seeing composers get cheated like this.

Music Dealers rode on a high horse while taking advantage of composers for years. I say good riddance as well.
That is a powerful statement to say " taking advantage of composers for years".
I would like to hear about this "high horse" they rode on.

Seems the people who are saying (good riddance) are the ones who didn't get any placements. Which can be for a number of reasons, I wouldn't put that 100% on Music Dealers, maybe the music was not up to par ,or the music genre or sound was not in demand as much.

The artist who did get those higher placements from Music Dealers are not reacting in that same matter on the news of Music Dealers shutting down. Which leads me to believe there is something else going on when a few people say "good riddance".
Old 26th July 2016
  #18
Lives for gear
 
VitaEtMusica's Avatar
 

Last I heard, from a composer that actually did work for them, MD were all paid up on recent work. They brokered the music for this year's new global coca cola campaign, so they were still rocking not too long ago. The creative fees I saw them offer were as good as or better than Hum, Stimung, Elias, etc. So, I don't know that I'd be so quick to assume the cause of their demise. The fact is, they had a holy cow team of sales reps that fearlessly knocked down doors. I don't think it was as much about undercutting as it was swagger. But what do I know?
Old 26th July 2016
  #19
Quote:
Originally Posted by watchmanmusic View Post
That is a powerful statement to say " taking advantage of composers for years".
I would like to hear about this "high horse" they rode on.

Seems the people who are saying (good riddance) are the ones who didn't get any placements. Which can be for a number of reasons, I wouldn't put that 100% on Music Dealers, maybe the music was not up to par ,or the music genre or sound was not in demand as much.

The artist who did get those higher placements from Music Dealers are not reacting in that same matter on the news of Music Dealers shutting down. Which leads me to believe there is something else going on when a few people say "good riddance".
Well here is a reason they faltered: The day the music dies.

But nothing to worry about now. The company has folded. Time to move on to bigger and better things. I only hope the composers that are owed money can recoup most or all of their money.
Old 26th July 2016
  #20
Lives for gear
 

Quote:
Originally Posted by watchmanmusic View Post
That is a powerful statement to say " taking advantage of composers for years".
I would like to hear about this "high horse" they rode on.
I don't know much but I do know that three big deals with major corporations went wrong and nobody got paid (including me on their deal with Sony). Once is believable, but three times? It begins to look like a strategy. I withdrew everything a while back
Old 26th July 2016
  #21
Gear Nut
 

Quote:
Originally Posted by PeteGJ View Post
I don't know much but I do know that three big deals with major corporations went wrong and nobody got paid (including me on their deal with Sony). Once is believable, but three times? It begins to look like a strategy. I withdrew everything a while back
Please explain when you say "nobody got paid". Are you talking as in employees , investors or artists?
I do know of artists that made good placements from the Coke deal.
Old 26th July 2016
  #22
Lives for gear
 
Jeff Hayat's Avatar
 

Quote:
Originally Posted by Desire Inspires View Post
Well here is a reason they faltered: The day the music dies.

From that art:

We recently lost a music licensing opportunity. We proposed a fee of 1K for the requested use.... The client was able to secure the exact same song from another vendor for $250 - a quarter of the value we proposed.... This predicament says quite a bit about music licensing and the “race to the bottom” theory that we’ve all been forced to face.

Am I missing something, or were they not doing that very same thing?
Old 26th July 2016
  #23
Quote:
Originally Posted by Jeff Hayat View Post
From that art:

We recently lost a music licensing opportunity. We proposed a fee of 1K for the requested use.... The client was able to secure the exact same song from another vendor for $250 - a quarter of the value we proposed.... This predicament says quite a bit about music licensing and the “race to the bottom” theory that we’ve all been forced to face.

Am I missing something, or were they not doing that very same thing?
Heck yeah they did!

That is the reason many libraries went "exclusive".
Old 26th July 2016
  #24
Gear Nut
 

According to the Financial document in the notice being sent out

Fiscal year payments for 2014 were $639,540, but fiscal year 2015 were only $7,800 after the Cola Deal went bust.

Assets: 1millon
Liabilities: 11 million

Exclusive contracts reverts after three years
Old 26th July 2016
  #25
Gear Head
 
topaz's Avatar
I wonder if my next bankrupt letter will be from audiosparx, that's a huge bubble waiting to burst.
Old 26th July 2016
  #26
Gear Head
 
topaz's Avatar
I pulled all my tracks from Music Dealers a couple of months ago, my feeling was a gigantic ever inflating low budget bubble waiting to explode.
Old 26th July 2016
  #27
Gear Nut
 

Quote:
Originally Posted by topaz View Post
I wonder if my next bankrupt letter will be from audiosparx, that's a huge bubble waiting to burst.
The royalty free sites. (SMH) I saw a track in there for $75.00 and was also in a huge well known library. (The road is s*cret) I don't get it, the composers who are complaining about not receiving many placements from libraries, blame various companies, yet they will sell the music/same songs on royalty free sites for dirt cheap. What am I missing here?
Old 26th July 2016
  #28
Quote:
Originally Posted by watchmanmusic View Post
The royalty free sites. (SMH) I saw a track in there for $75.00 and was also in a huge well known library. (The road is s*cret) I don't get it, the composers who are complaining about not receiving many placements from libraries, blame various companies, yet they will sell the music/same songs on royalty free sites for dirt cheap. What am I missing here?
if you see music that is listed on a bigger exclusive library, and then it is also listed on a RF site for super cheap, chances are the copy on the RF site is stolen. I've seen that happen occasionally, where someone with no talent and can't write their own music goes onto a big music library site, records the streams from the players and then reposts the music as their own on an RF site, sometimes they even put the original composer and use the original track name!!! I know several people personally who have had this happen to their music.

If you do notice this, try to report it to both libraries. Some of the big libraries spent a lot of time policing this sort of thing, but it's hard to find the needles in the haystack.
Old 26th July 2016
  #29
Gear Head
 

Just for the record, I did get paid a small but respectable fee for producing a demo for them, for an opportunity they had... My track ended up not getting picked, but I got to keep the demo fee and the rights to my track. The other tracks I had signed with them non-exclusively haven't earned me a single penny, but I did appreciate the opportunity I had for that demo deal. It only happened once, but it was a fun experience.
Old 26th July 2016
  #30
Here for the gear
 

Responding to Topaz above, it’s always sad when a music library goes out of business, but AudioSparx just celebrated 20 years in business with an essentially steady growth, and 2016 will be our best year ever.

While sales are a bit off since it’s summer, RadioSparx is expanding rapidly, now streaming in 65 countries… Pop Vocals remain our best-selling music station, along with Easy Listening, Club, Dance, and Lounge Jazz…

Hope everyone's enjoying a pleasant summer.
Cheers,
Barbie

Last edited by AudioSparx; 26th July 2016 at 08:51 PM.. Reason: Wanted to put in a note who responding to
Post Reply

Welcome to the Gearslutz Pro Audio Community!

Registration benefits include:
  • The ability to reply to and create new discussions
  • Access to members-only giveaways & competitions
  • Interact with VIP industry experts in our guest Q&As
  • Access to members-only sub forum discussions
  • Access to members-only Chat Room
  • Get INSTANT ACCESS to the world's best private pro audio Classifieds for only USD $20/year
  • Promote your eBay auctions and Reverb.com listings for free
  • Remove this message!
You need an account to post a reply. Create a username and password below and an account will be created and your post entered.


 
 
Slide to join now Processing…
Thread Tools
Search this Thread
Search this Thread:

Advanced Search
Forum Jump
Forum Jump