RealTime IT News

CFO Out as Loudeye Tightens Belt

Digital media software firm Loudeye Corp. on Monday announced it would lay off 37 percent of its workforce and dismiss its CFO, yet another sign that the retrenchment in the online music business has not subsided.

The Seattle-based firm announced the cost-cutting moves just months after acquiring Wonderhorse to expand its realtime data sharing and collaboration products.

The company, which boasts a roster of big-name clients like America Online , Microsoft Network and Napster, said it would also cut salaries of its executives by 10 percent.

The duties of the chief financial officer would be assumed on an interim basis by the Loudeye VP of finance and controller, Jerry Goade.

Loudeye, which markets services that include rich media application support, Webcasting, hosting, storage, encoding, capture and media restoration, said the belt-tightening measures would save about $10 million annually and would results in a charge of $1.7 million in the second quarter.

After the layoffs, Loudeye said its workforce would total 130 at locations in Seattle, New York and Los Angeles.

Like many of its peers, Loudeye has felt the crunch from the advertising recession, which has forced many streaming media dot-coms out of business. The company was banking heavily on its deal with Napster to generate revenues but, ever since the controversial file-sharing service ran into financial troubles of its own, the company was forced to restructure its operations.

Under terms of the Napster deal, Loudeye was picked to digital "fingerprints" and related descriptive data to the BMG-owned file-sharing network for use in its planned membership service, originally scheduled to launch this summer.

Loudeye also has a multi-year pact to provide America Online with music samples, music catalog encoding and metadata services. The deal calls for Loudeye to support digital music content across certain AOL properties, including Spinner, the Internet radio service.