A note from the Qtrax Team

We are a little Company. Admittedly about to do a fairly major thing- bring free & legal music downloads to the world. But even before we do, we seem to attract a lot of speculation and attention- some of it probably our fault, some of innocent, some of it not. For the record, let’s sort out the truth from the BS, if we may:

Yes, it is true that we intended having a Press Conference today. And it’s also true, that in the last week, our CEO, became ill with a generally non-life-threatening but quite painful ailment- kidney stones. And it is also true he was admitted to hospital & thankfully is leaving today. So we’ve decided to cancel the conference.

What were we going to say? Pretty simple really. That we were finally launching in January. Are we? Yes. Have we been wrong before? Humiliatingly, yes. Will be wrong this time? No.

Given the turn of events, we’ve also decided, no need for another conference- we’ll just launch. Let the fanfare follow rather than precede.

What are the pre-requisites for launch? Many- but to perhaps overly simplify it, technology and funding. We feel, in our humble opinion, that we are more than right on the technology and recently we’ve proudly raised money and had more committed. So we can finally get out of the gate. During January.

We obviously would have loved to do it before & humiliatingly announced we would- it wasn’t to be.

Finally, it has clearly been a tough year for us- and many others. But we are very pleased that we’ve survived, that our consumer proposition has evolved to be stronger than ever and that we have a host of supportive partners & friends.

We also are occasionally displeased that our teams tireless work in bringing a proposition we believe passionately in, to the world, is blatantly defamed by a very few detractors- some of whom, hide behind curious names on blogs, others are more brazen. They will not stop us from launching something that we think brings value to shareholders, partners & consumers alike. Yes, we have stumbled. Even fallen. But we’ve proceeded. They freely blend fact with fiction for their own purpose. Which is, in simple terms that we should be prevented from succeeding. And if God forbid, they are right about something, they will crow that they are right about their defamatory statements. For example, through a simple piece of detective work, they discovered our CEO was in hospital. They implied that it might be contrived (pretty disgusting but not the worst of what they do) and now they will say- see we were right, so we are right about our defamation. Well, we’ve turned the blind eye for some time to people whose identities we are all too familiar with. But our patience is just about expired.

Despite, any annoyance, we end the year happy & inspired- that in a matter of days, rather than months, we will bring our vision, for monetizing music to the world. As Bob Dylan says: “Everything gonna to be diff’rent, when I paint my masterpiece”. That worries some greatly. Pleases others hugely. Soon you’ll be the judge of what we’ve worked on for years. A good reason to rejoice. Happy Holidays!

– Qtrax Team

Quick note

We’ve been silent for some time. We are now just about ready to talk. And on Thursday, Dec 24th , 2009 @ 11 am we will. Via an audio press conference. We will have some major things to say. Publilius Syrus, a Roman author from the1st century B.C said it well: “Delay is hateful but it gives wisdom”. Perhaps, in our case, wisdom to be silent until we are ready to speak. As someone wise once said: “Do not speak unless you can improve on the silence”. With that standard in mind, we’ll be speaking on Thursday, Dec 24th, 2009. Hopefully, we can bring a bit of holiday cheer.

–AK

The Deal

Let me be succinct- or at least, a little more so than usual- because we’ve got a few things on our plate.

Everybody is entitled to their opinion. Whether it be favorable, unfavorable, mild or strident. And people can be innocently wrong in their opinions. They can make mistakes about information. It happens. Take the article about Baidu not linking to us, not creating traffic for us. An IDG story in PC world & other IT publications. The journalist in question and his admirable editor, allowed themselves to be exposed to the full facts and re-issued the story. I thank them. For their professionalism.

We get lots of criticism, as can rightfully be expected for a business that takes so long to establish. (I personally, no doubt deservedly, get more than a small share of it.) It should never be discouraged.

But when people knowingly publish bald-faced lies, the same tolerance should not be extended. And when the sole intent is to do corporate and/or personal damage, dishonesty reaches an even more despicable level, if that’s possible.

The recent claims that our Baidu deal is not the “real deal”- that it is a purchase of referrals etc., an SME deal, is a complete & utter lie. And one that was concocted by somebody, from beginning to end. There was no source. How do I know that? I know because the fabricated assertions have no resemblance whatsoever to the deal. They are lies- nothing more and nothing less.

And they come after repeated predictions that we would never get such a deal. We would not. We could not. So when we did (and got a ton of positive press), the easiest thing is to invent a lie or a series thereof. To diminish any positive impact the deal might have for the Company. To effectively render it a non-deal. Consistent with the original prediction. As quickly as possible. It’s a charming world!

We would never, btw, claim the Baidu deal is something that it is not. It is NOT referring traffic from the Baidu main music search page of mp3.baidu.com. It does NOT represent a settlement between the industry & Baidu. But it WILL generate very substantial traffic for us. And we are NOT paying for that privilege. And it IS an important first step towards legal music.

Often, we or perhaps I, deserve criticism. We try to take it on the chin. If it’s deserved, we don’t want to suggest otherwise. Today we were supposed to Launch in Australia. We didn’t. In my book, that is worthy of criticism. A lot of it, actually, because we’ve had delayed launches before. Yes, there have been overwhelming reasons but so what? People have a right to expect us to be reliable. So I apologize. There is no excuse. We should have been on time. We are not. I can only say that in the coming days, we will be out there. In all of our glory. One can only guess what those that wish us badly will say then.

This of course hasn’t been easy road. Perhaps we were far too ambitious. We aimed very high. To have the only global free & legal download licenses in the world. It took us 7 years of obsessive work but we succeeded- where no others have. Perhaps we aimed too high with a Baidu deal. But we also eventually succeeded- where to date no others have. And perhaps we are absurdly cocky in thinking that we can create a far superior music service supported by a uniquely viable ad-model. With partners around the world. But we do & I firmly believe we will.

It has taken 18+ hour days under extreme pressure, 7 days a week. Over years. And my highly talented colleagues have similarly dedicated themselves. We are committed to delivering something truly valuable for shareholders- which is not as selfless as it sounds because of course it includes ourselves. It has taken every ounce of energy & concentration to be able to survive and advance. Challenging, mostly grueling days & nights. But we don’t ever feel sorry for ourselves. We have no right to. We are doing this by choice. And often, enjoying ourselves. But occasionally, we do feeling a searing sense of injustice when lies are concocted to hurt us or impede our progress.

But we will prevail. And none of this matters in the end. What matters is us delivering. That is our sole focus. We have put unparalleled, powerful building blocks in place. Now we are about to activate a unique business incorporating those hard won elements. It has been too long for our shareholders. And us. As to those that will celebrate any hardship we encounter and diminish our achievements, good luck to you. To quote a wise man I once knew: I wish them double what they wish us. Since, they are well motivated, they should have nothing to worry about. I’ve just blessed them.

What’s the REAL story?

PART 1- THE IMPORTANT STUFF

Well I am not a very regular or reliable blogger, am I? I should have been back at it, a couple of weeks ago. It’s just that I really wanted to be able to tell you something of import. Many bloggers are able to do that daily or even more often. To them, I take my hat off. It’s quite a skill. After all, that is supposed to be the salient virtue of blogging- immediacy, frequency. And some people can accomplish both and remain meaningful. Others strive for the frequency but fail on the meaningfulness or newsworthiness. But more on that later.

Bloggers are a bit like naturopaths. It’s not that I don’t believe in alternative medicine. I do. I think it can be hugely beneficial as an alternative to the practices of the medical establishment. It’s just that I don’t know how anybody can ascertain who has the right credentials and who hasn’t. It’s the same a bit with bloggers. The best of breed are great and no doubt meet or exceed the highest journalistic standards. And then there’s the rest. And one often cannot ascertain the qualifications. Or the motives. But more on that later, too.

Back to myself, the unreliable blogger. Now that the final pieces of the jigsaw puzzle are falling into place- funding, strategic partnerships, launch plans etc. I will be a little less pressured and hopefully a little more reliable as a blogger. I’ll work at it, because I owe it to you and less importantly, I quite enjoy it.

It’s no fun when blogging is a one way street- with you as the subject but never the author. And there is no question that certain bloggers use their sites as a form of “bully pulpit”- to bludgeon others who cannot readily find a voice to fight back. It’s quite uplifting when you find that voice and are liberated from the “sitting duck” position. I have, perhaps reluctantly, found that voice and I am going to begin using it.

Now, my musings aside (OK- musings are too kind a word, I will accept ramblings if you insist) , what all of you are waiting for are some tangible facts. For the Qtrax shareholders and onlookers. Of course the central fact that everybody has wanted to know & has had an overdue right to know is : When are we going to get the show on the road? When is the launch date? And the corollary question: Is that really the date? Is that set in concrete? Is it reliable? Well, I had delayed providing the launch date having learnt from unexpected delays that have caused us all angst in the past. But yesterday we were ready. The answer of course to “when” was October 29th, 2009. That’s it. It won’t change. We announced it “formally” with good reason. Some will criticize it as too far in the future. What can I say? Getting it exactly right (not to mention monumental) is paramount. After 7 years, what’s an extra few weeks. So that is the “when”.

The “where”? We will be initially launching in 9 Asia Pacific countries- China, Hong Kong, Taiwan, Philippines, Indonesia, Singapore, Malaysia, Australia & New Zealand. “Why”?

I could give you endless stats but here are a few:

• At 330 m Internet users to date, China has more users than the USA has people
• In China, internet usage is growing @ 41.9% per annum and over 90% is broadband
• Asia already has 42% of the world’s Internet users but in the next 12 months is likely to account for a majority
• Approximately 83% of China Internet users download music versus less than 40% in the US.

So there is the “when”, the “where” & the “why”. Stay tuned for the “who”: With which strategic partners will we launch? And which industry leaders? And celebrities?

And finally, the detailed part of the”where”. In which city will the global launch take place?

Notwithstanding my blogging unreliability, I promise you more details every week. We’re really excited and we would love you to join in our escalating excitement.

Now back to the blogging world. You might think, that if your blogging beat is technology, there is so much that you’d want to cram into your reporting day. Both in the US & the World. I don’t have such an inflated ego that I think that Qtrax is hugely newsworthy….yet. Especially before we have even announced a launch- i.e. prior to yesterday afternoon. And especially against the myriad of technology breaking stories.

So it struck me as unusual, perhaps suspicious, that anybody would want to report on our passing altercation with Oracle. But they did. And then they wanted to regurgitate it. In another article. And for good measure, include a copy of our check to Oracle in both articles. As big as possible. Now, any curious mind, my own included, would have to ask: why?

PART 2- THE IRRITATING STUFF

Well the first part of the “why” I know. There is a disgruntled gentleman who tried his hand at what we are doing & failed. And astonishingly, widely blames me. Well, he has been talking to the journalist behind these riveting stories and he, the “source”, has plenty to say. All of it negative. Much of it twisted. Some of it libelous. At least the journalist left out some of the more libelous stuff.

But that still doesn’t answer the question of newsworthiness. Nor for that matter, does it explain the personal rudeness to me of the journalist in question. Which I have had the pleasure of enjoying at about 4 am on a few different occasions. Now that’s only 1 pm his time, so don’t think of him as a stalker. That he is not, though his “source” arguably is. He has tracked me down to a hotel, called and hung up. And boasted about it! I think that might be a bit unhinged but I am sure that a professional could make a more reliable assessment.

But this journalist, seems to have some sort of crusade which allows him to go beyond many conventional bounds, including what is newsworthy.

Last Friday, he declared he was publishing a story on more “breaking news” (my sarcastic words, not his)- sadly it’s hard to see how it’s “breaking” or “news. We have a somewhat dated lawsuit going on with a Company called Millenium. They provided services for our servers before our aborted launch at Midem. We paid them some. And frankly struggled doing it, at the time. I can’t say more than that most of our suppliers have been wonderful. There are sometimes, exceptions. The legal system can decide if this is one. And then there’s Las Vegas Wall Street Group. A quite recent loan that it is claimed, is overdue. And there is a consent to a judgment signed by me. The facts will soon emerge about that also. Oh & just in case, it is deemed to also be newsworthy at some time in the future, there are a couple of outstanding lawsuits with toxic PIPES. As I’ve advised before, Google that term please.

First of all, I have not yet satisfactorily answered my question: Why would this journalist focus on these somewhat miserable facts and use his valuable column inches on us? Not only are there bigger stories- including by the way, the stats I include above re China- but also we are not yet launched. How do we qualify as newsworthy?

Furthermore, a start up, having trouble paying their bills, that would be unique, wouldn’t it? One of my advisors suggested it might approach a figure of 100%- particularly in these times. Ah, but the journalist might say, there is more of a story here. There is a “pattern” of not paying bills- really? Unlike, so many other start ups, we have NOT gone under, even in the most difficult of times and indeed been willing to give ALL of our personal resources to paying bills & making this work, for our shareholders- and of course, ourselves. I don’t want to portray us as heroic- we’re no doubt very far from it. But we certainly have and will use whatever personal resources we have to make Qtrax a success.

Ah, but the journalist might say, what about the returned checks? Well, we gave checks ahead of time- postdated- (when we didn’t have money) based on promises of funding. And we were wrong in our belief it was coming. But we have found alternative funding and item by item, have been paying for EVERYTHING. More than can, for example, be said of the companies associated with the source. His companies folded twice, as far as I can tell- I wonder how much the investors got in those scenarios? I don’t know but I could guess.

Ah, but the journalist might say, what about the lawsuits? Too high a number for things to be regular. I don’t know about the number. I know about the genesis and they each had their cause- sometimes an injustice we would not abide by, often just shortage of money. And given the fact it has taken us a sizable sum to get here, they represent a VERY SMALL % of total transactions.

Ah, but the journalist might say, Klepfisz is “unreliable”. When it comes to launch dates, in the past, he is right. And he would be right about many other software producers. Including the largest.

When it comes to having the requisite funds, when promised, he is also right. Sometimes, because of broken promises of others, we did not have the requisite funds. But we found them in due course.

But if the “unreliable” word is intended to smear my honesty or decency, then I won’t tolerate it. Sadly, that’s very precisely the intention of the source. And beyond that, he is intent on making it harder for us to progress. If he couldn’t get funded, then we shouldn’t either. The journalist is either wittingly or unwittingly assisting in this goal. Thankfully it won’t work.

So there are cascading attempts, to demonstrate that I am somehow “bad” and Qtrax is somehow lame & ill-fated. I come back to the question: why?

A friendship and/or dialogue with the “source” might explain it. But not fully. And for me it remains an unanswered question that spawns several others….

Could it be related to the fact that the journalist’s blog is owned by a company that also owns a major free music, ad-supported competitor to us? Possibly not but who knows?

Is it curious, that the journalist never mentions this fact?

Is it interesting that he has slammed ad-supported services recently but not the one owned by the blog’s parent? (I intend to address these broad brushstroke articles about ad-supported services in a rapid, follow up blog. I would agree that most don’t have a chance. But we have made ourselves, with years of work, hugely different. And not only because of having the only global free & legal download licenses. We have worked really hard on a series of pivotal differences. In costs & revenue. Rendering us almost diametrically opposed. I offered the journalist that story. He had no interest. NONE. Why?)

Could it be that he is just embittered? Or enjoys the power of potentially inflicting damage? I really don’t know. What I do know, is, that there can be very few readers who think that this latest blog on us constitutes fascinating reading. From my own (possibly biased) point of view it is a smutty attempt at nobbling us. I note that as of writing there were only 3 comments- 2 of them duplicates. I suppose that comments are at least one metric for reader interest.

But we won’t be nobbled. And we will launch. On October 29th, 2009. The disbelievers should continue without wavering. That will make our moment sweeter. The underminers can continue to undermine. But we are going to strike back. By exposing. By protecting. And if necessary, by utilizing the legal system. And for the 99% of well intended individuals, we will give you reason to celebrate. It’s time for the dogged to deliver.

–Allan Klepfisz

A Comment About Comments

We at Qtrax encourage a healthy discussion on the state of our business and digital music in general. We realize that many people are left to make assumptions and fill in their own blanks when information is limited. That’s cool and expected. However, using this forum to flat out “make shit up” is not healthy for anyone. We’ve been open and honest about what’s going on, and realize that people expect more communication and want Qtrax up and running now. So do we, trust us. We’ve let the open forum thing run it’s course hoping that supporters and detractors alike could share in a constructive discourse. Obviously, things are now out of control and I’m shutting down the ability for anyone to post comments (good or bad) immediately. From now on, I’m going to moderate the discussion. And I’ll take my sweet time doing it too, so don’t expect me to be getting all jumpy whenever you send a new comment for my approval. I’ll get to it when I get to it. Sadly, this could have gone the other way and I really don’t look forward to moderating a comment board that has become somewhat like the cheerleaders versus the burnouts at my high school back in the day.

Qtraxer

The Costs of Higher Education

There will probably be more from Allan shortly (hmmm…that seems vague). In the meantime (which is a good song by Spacehog–go ahead, indulge: Song/video), I’ll post this short note on the heels of another massive verdict in the ongoing litigation against illegal file sharing. Here’s the quick story taken from Ars Technica:

After just 3 hours of deliberation, the jury in the RIAA vs. Joel Tenebaum has ordered the student to pay $675,000 in damages or $22,500 for each of the 30 songs that he downloaded.

When asked about the size verdict, Tenenbaum’s attorney and Harvard Law School professor Charles Nesson told Ars that “it’s a bankrupting award.” Nesson believed that the outcome might have been different if he had been allowed to argue Fair Use. “We were not allowed to speak to fairness,” he told Ars. “I thought we had pretty damn good arguments on Fair Use.”

Tenebaum said that we would probably declare bankrupcy if the award were not overturned.

Combine this with the $1 million + verdict against the single mom from Minnesota and it’s pretty easy to see who has got both the law and the powerful lawyers on their side. Joel got some Harvard law professor to represent him. Please. Lord, what fools these mortals be.(B.S.)

Yet in this brave new world of internet bravado, a mere public flogging or two (although well within their rights) is not going to endear the record industry to it’s consumers nor is it going to derail the juggernaut that is illegal file sharing. So what’s the point? IMO it’s to prove a point. A point that has dogged the record industry for the past 10 years. One that’s been been challenged by a new distribution method and a generation of users who assume music is free. It’s not. Not quite yet anyway.

Here’s my advice to anyone who gets a file sharing ticket while speeding around the internet. Pay it. Going to court is a bad idea.

On another note, here’s a link to one of the funniest articles I’ve read in a long time. This came out last week, but it should be added to the dictionary as the example listed under “irony.” Enjoy: Limewire Pizza Party.

The Week That Was

…another note from CEO Allan Klepfisz

Well here I am on another plane- different seat, different airline, different food, same ocean- Pacific that is- but racing back the other way- to the Orient. Didn’t get a chance to unpack my travel bag- literally- or to unwind at all, for that matter. Though it’s been a great number of months since I’ve done that. But it was good to be back in NYC & quite a bit got accomplished. It feels great to be at your office desk not to mention sleeping in your bed for a few hours here & there. But those delights are necessarily fleeting for the moment as there’s so much to be done- after all, we’ve got to get this thing damn well launched. ASAP. It’s excruciating to wait a moment more than necessary. But more on that later.

The highs & lows of our weeks somehow get more extreme. The highs were numerous in this past week: Meeting several industry execs who independently were exceptionally supportive and actually “got it” completely. I think understood clearly how we were going to be radically different to all existing propositions. Not only the first free & legal music download service with major & indie support and global licenses. But also a service getting out to the world and creating marketing relationships with the biggest & best of search, internet & media companies. And understanding how to maximize ad revenues.

And there were the large number of private messages and quite a few blog postings that gave me immense encouragement after my inaugural blog. For which I thank you all, greatly. It isn’t an easy journey, sometimes. Not that I have an inclination (or right for that matter) to complain. And although it has a ton of uplifting moments, it also has those very low moments- brought about by the “usual suspects”: personal poverty, extreme sleep deprivation, broken promises, delays in funding, encounters with dishonesty, ill-intent & greed, etc. But a good word from a good person has a way of making those occasional low moments, vanish instantly. Not that they hang around for long, anyway. But I am absolutely buoyed by those that wish us well in our soon-to-be-a-reality mission. And as for the others- well, of course, my knee-jerk reaction is to tell them to f*** off. But let me rather provide you with a more balanced view of them.

I don’t spend a lot of time reading the blogs on Qtrax. But occasionally I do. Or some understandably irate supporter brings something to my attention. It is at the very least interesting, to be a bystander to an intermittently raging debate, as to whether I am a con-man, crook, thief, liar & cheat or something a bit more noble. I don’t want to list the adjectives that might accompany the bit-more-noble alternative as no doubt they are exaggerated & I would blush. But I hope I don’t offend my supporters when I say that I can understand the sentiments of some of the sincere naysayers. Qtrax has been too damn long in the making. (I am not sure how we could have done it quicker & the impossible does take a bit longer but the criticism is nonetheless valid). And we have had to alter launch dates (& other critical dates) way too many times. (Almost always related to delayed/broken promises in funding [and the big boys delay all the time] but we’ve been wrong, nonetheless). And we have not kept our shareholders as well informed as they have a right to expect & demand- no question about it (We have worked round the clock to build something for them but that’s no substitute). So if you didn’t know me- either personally or via the written word [which I haven’t facilitated until now] you could well conclude that I am any and all of those pejorative terms. And if that is your sincere conclusion, I am the one to blame for not communicating with you better. It is not a completely unreasonable conclusion (although as it happens far from the truth. If however you have some motive in condemning us- like you’re bitter or jealous or a competitor or both, please excuse me for saying: screw you. Now, to be fair, with a couple of notable exceptions, I don’t know whether any particular blogger is one or the other- sincere or disingenuous. So I am not going to condemn anybody. Criticism is good. It’s welcome. And no doubt, it’s often justified. And if we listen, we hopefully will improve. And even if it comes from a twisted, jealous f***, it may contain something truthful from which we can learn. Having said all of that, if somebody is out to destroy us or to even merely impair our progress, we will not take such interference lightly. We welcome the critical. Even the misguided. As long as they don’t try to interfere in us accomplishing our goals on behalf of our many & varied stakeholders.

So back to the week of extremes. As I was saying, among the highs was important industry execs, being very helpfully supportive, . And also great progress in fundraising. A very prestigious brokerage/investment house declaring their intent to raise funds for us & executing a mandate. A public company signing an MOU (when it becomes binding we’ll announce it) to invest in Qtrax Greater China. Very high profile celebrity interest in our launch.

The overriding “low” was continued corporate (& personal) poverty. But God willing, this might be the week (or two), that fixes it for once & for all. In a non-denominational way my fingers are crossed. And I am extremely hopeful. With good reason.

Another “low” of the week is of course the highlighting in the press of our dispute (more like a tiff really) with Oracle. I could say a lot about our version of events. Arguments I happen to think are very compelling. (Including the fact that we paid for all of the existing licenses handsomely and in full under an old contract, moved to a new one for the next 3 years to cater for the global roll-out post-launch but have not utilized ANY additional software since & of course haven’t launched and that consequently for a start up, in this economic environment, we weren’t seeking too much indulgence.) And there’s even some juicier stuff. But because I believe the lawsuit will be withdrawn by week’s end let me rather focus on the fact that I think we have had & will once again forge a great partnership with Oracle.

By the way, I wouldn’t be surprised if there’s more bad press. Bring it on. I’ll have more to say about that in a blog in the next 24 hours. Nothing new- just the same stuff rehashed. Orchestrated by somebody with a real vendetta against us or more accurately, me. Blames me apparently for the fact that his business (trying to do something similar to us but of course much smarter) never got off the ground. It’s amazing how as you get closer to the finish line the jealous become more jealous and the badly intended, more so.

Now, I cannot sign off without a discussion of our launch date. So are we going to set a launch date? Well, I said in the last blog that we will do so when the money is deposited. And I thought it would happen by now. I was wrong. It is not yet deposited. But it is scintillatingly close. So stand by. We will be announcing that FINAL, IMMUTABLE launch date very soon.

More on the way

Ahhhh patience…life’s wonderfully difficult attribute. Allan Klepfisz wanted me to share to you all that he’s writing another update. It should be up soon.

Qtraxer

A Note From Allan Klepfisz

The Impossible Takes a Bit Longer

I suppose most of those that will read this first blog of mine, don’t know me. Though that doesn’t prevent a few supporters and indeed detractors from writing with the sort of certainty and detail that implies an intimate knowledge of, not only me, but also my motivations, character etc. In this age of blogging you can enjoy the illusion of having many more friends (and enemies) than you’ve really earned. Hundreds, if not thousands, can now exchange tweets with you. But I recall (from the days when I knew an occasional moment of leisure) that there’s nothing quite like a couple of really good friends. But to be a good friend of mine, these days (and I suppose for the past 8 years), you have to suffer all the considerable indignities I throw in your direction. Including but not limited to having no time to ever go out with you (or even socialize with you in my very occasionally occupied home), making highly unreliable times to talk with you on the phone, etc etc. There are clearly very few that would put up with this sort of mistreatment & so my friends are few. But hugely appreciated because I am the undeserving recipient of their undying loyalty. And they understand my obsession to accomplish the heretofore impossible. On behalf of my shareholders, my hugely deprived but amazingly focused and dedicated and inspired and inspiring colleagues & professionals, my family, my creditors & just in case I sound too damn altruistic, myself. In no particular order.

The entrepreneur- which as I write it sounds like far too pompous a title to attribute to oneself- can sometimes be selfless. Something I (usually feebly) aspire to. But if he is dedicated & “inspired” he is inevitably as selfish as hell. Because nothing stops in the way of “the vision”. And whatever he sacrifices of his own, he also mindlessly sacrifices of others. Most particularly his family. And friends. But perhaps I will try to assuage my towering guilt on another blog.

But back to my original assertion- most likely, you don’t know me. Well if you knew me, you’d know that in the mix of my few virtues & multiple flaws, I have an attribute which is probably both- to the extreme. I have a quite obsessive need to pedantically report it, as it is. Every scintillating and bloody boring detail of the truth. Unabridged, unexpurgated, relentless, accurate detail. The good, the bad & the ugly. And then some. Perhaps as a consequence, silence is a challenge for me. But one that I’ve been forced to master over the past few years- at least in so far as denying myself a voice in the public arena. My main reason for doing so is pretty mundane- no damn time. And the feeling that in the 20 or so hours a day, 365 days a year that you must dedicate yourself to achieving the impossible (and staying alive to do it), you are not doing everything that’s needed. Indeed, for all that you get done there’s so much that you can’t. And the notion of squandering time, explaining rather than doing, is not an attractive one.

But it’s become a necessary one and one that our long-suffering, amazingly supportive shareholders can rightly think is way, way overdue. So from now on, I’ve decided to use those occasional down times, when your output is curtailed by circumstances- like flying over the Pacific as I’m currently doing- to share a few facts, thoughts & lots of ramblings with you. Of course in detail. And most importantly, calling a spade a spade. Or even better, a bloody shovel.

Some of the questions I hope to answer are: Why has Qtrax taken so damn long? Why have we suffered multiple and major delays not to mention false starts? Why do we nonetheless think- more so than ever- that we have a completely unique proposition that is going to give the consumer, the artist and the rightsholders, so much more than they’ve enjoyed to date, in the digital age. And be a badly needed paradigm shift for the music industry. And why do we think- more so than ever- that the other models out there just don’t work. And what’s so damn unique about our model. And aren’t we just another crappy ad-supported model? And why would anybody believe, after all the delays, that finally we are going to be launching throughout the world, progressively? And how does an impoverished little company, that’s fought & is fighting so many battles get on its feet- financially & operationally? And when is everything supposed to be happening, this time? See that’s the trouble with the Pacific Ocean- it’s very big and the flight’s long, so you might be getting more info than you’ve bargained for.

Qtrax has taken so damn long because the impossible really does take longer. We are the only company in the world that has global licenses for free & legal downloads. From majors & indies. And there is only one territory in which they exist in the hands of others- China in which Top100 hits has a limited catalog in partnership with Google. And we have these rights for the world.

Now- am I claiming that in achieving the impossible, we’ve been highly efficient? Absolutely not. We’ve tried hard but the truth is that if total efficiency is the goal, we’ve failed. I’ve failed. You want examples of failure, wretched reader? Well here they are. We have had several iterations of the software. We chucked out the earlier ones and built something that is unparalleled, we believe, in its functionality. And ease & speed of downloading of music tracks (Perhaps 5 seconds). And accessible encyclopedic information. But in building this extraordinary product, our brilliant CTO, Chris Roe, abandoned just about everything from prior efforts. As did our unerringly spot-on content czar, Matt Kramer. So we wasted a lot of time in getting to a great product. And in shifting our team from Australia to NYC. And in stopping & starting as money ebbed & flowed. Boy, have we had a lot of stops & starts.

We’ve also been inefficient in going through two sets of expensive licenses with the music industry. We threw out the first set. They were too restrictive and didn’t allow us to present the ultimate consumer proposition: free, high quality, downloadable music. A massive catalog. Unlimited plays. Etc, etc. But the first step was the unavoidable stepping stone to the second as the industry liberalized it’s thinking.

And of course we had an aborted launch. In Jan, 2008. But enough has been written about that. Our spectacular international humiliation. That had a massive silver lining. We could demonstrate how huge a desire there was for our service. And we increased our resolve to be able to offer an unparalleled service. And globally.

But despite the fact that these “detours” have robbed us and our supporters of time, we have remained undeterred in our mission.

It’s not the done thing, perhaps, to be so direct but in my view it’s the only way to be. It may provide fodder to those that are dedicated to undermining us- whether because we are encroaching on their territory and threatening their business models (including the illegal ones that enrich themselves at the expense of the artists etc) or because they are twisted & jealous (I won’t name them because to do so would be to reduce myself to their level of character assassination). But telling it, like it is, warts & all, is pretty damn important. The twisted bloggers are great at frankness within a very narrow band- the warts of others (none of the good stuff about others ) and never, but never, their own warts. In fact, they are perfect & hence supremely qualified critics. If only the truth was not the reverse.

So, while making those lofty observations about telling it like it is, let me be even more frank. We have most often suffered delays because of lack of money. Did I say that? Do corporations ever say that? Probably not. But let’s aspire a little higher on the frankness scale. Oh, we raised a lot of money- and spent it as judiciously as we could (which we think was pretty damn judiciously), notwithstanding my confessions above to certain inefficiencies. But this is a crazily ambitious project and we’ve always needed more. Indeed, it is delays in promised monies, that have in turn, delayed us once more. Broken promises with money tend to create a vicious chain. Somebody promises somebody else who promises us. And any broken promise, in the chain, leads to delay on our part. Not to mention to our own set of broken promises. Now, don’t get me wrong. I am not attributing the blame to anybody else. The buck (or lack thereof) stops with me. Probably, by now, I should have learnt to not make ANY predictions. Even with all the requisite disclaimers. But people, rightly want some guidelines & timelines. And so we try, not often enough, to provide them. But in a way, it’s too often. Because, particularly, in these unpredictable times, it’s very easy to be wrong. Because even if you add plenty of extra time to account for the unexpected, you can never accommodate a massive delay or a completely broken promise. But none of this is an excuse for being late. Nor is it an attempt to avoid giving what will, we strongly believe, be the final, unalterable, unmovable launch time. And we’ll do that in the next week. And you’ll be able to mark it in your calendar. And we’ll do a corporate update at the same time to give you a few more things to mark in your calendar. The reason we’re waiting until next week is we want to make sure we have the money in the bank. With money comes certainty. Our detractors may rejoice at the delay. We’ll all be rejoicing very soon. With much more joy. I just hope that the disbelievers don’t own any shares. If they ever did.

Our confidence comes from the fact that we have finally found the bucks (that we thought we had before). In almost sufficient & certainly substantial quantity, to do everything we want & need to do. Now, you might justifiably ask- could something go wrong? Could there be a further delay? My answer, and the only responsible answer, is anything is possible. And you can never be certain about funding until it’s in the bank. But this should be it. We have never had more money promised, with more certainty. From sources we trust. Whose word is their bond. And worth more than a 100 page contract. But if there is going to be the slightest variation, we will inform you ahead of time. We are confident. These people have previously delivered. And delivered. A very large amount in aggregate. Microsoft has often had major & repeated delays in releases. And they couldn’t use the money excuse. In our case, I think you know intuitively, that it’s the cold, hard truth. On to the next confronting question…..

So why is Qtrax unique & uniquely powerful? Because of its licensing contracts, certainly. But also, because of its business model. Refined over the 7 years we spent in the wilderness. Working on the licenses and thinking. And thinking. And thinking some more. Let me make a few reflections in this regard although I must ask you to forgive me if we don’t reveal every aspect of our “secret sauce(s)”.

First, if you want to have a viable ad-supported model, it helps to have people that know something about ads. Too many people that come up with a technology, even a winning one, place inadequate emphasis on the importance of getting the ad part right. Which after all, is the revenue, stupid! Or much of it. Now, my partners, Lance & Robin know a damn lot about advertising. They have lived it & breathed it for their entire professional lives. As many of you know (and are thankful for), Lance was (among many achievements) the founding publisher of Maxim magazine. And during the 8 or so years under his leadership, against all odds, the magazine became the number one men’s magazine in the US & sold hundreds of millions of dollars of ads to advertisers for our demographic- 15-35 year olds. And Robin- was of course the global Chairman & CEO of Universal McCann. In fact, made it agency of the year. These two guys happen to be damn smart at what they do. And not too dumb, otherwise.

Secondly, you need to make the site attractive to advertisers. Obvious, you might say. Well, not obvious enough to be a priority to so many sites including most that offer music. They are sinfully unattractive. Especially to advertisers. And user-generated content doesn’t help either. It often makes advertisers nervous. And most of the big sites to date, are based on user generated content. Which gives us a massive opportunity. Because advertisers need to come online to find our demographic. But they want to do it in a predictable environment.

Third, you need to be realistic about your revenues. Most of your income is going to come from network ads. Those low paying ads that populate most sites. You’re not going to earn a high CPM for them. In fact, you are going to early a decidedly lousy CPM. And only a small percentage of your inventory is going to be premium advertising which will necessitate negotiating with an advertiser and getting a more decent rate. But your business has to survive on low CPM’s and if it can’t, you’re up the proverbial creek without a paddle. We have tweaked & tweaked our business model, to make sure it can. And Robin has then modeled our business model- 23 times to date. Not because he loves the task but because we take this shit very seriously. Because guess what- we’ve worked this hard to create a successful business. Not a money, losing proposition. When (ok, if & when) we have tens of millions of users, we want also to be profitable. Call us weird.

Fourth, you need to be mindful of your costs. Something that streaming services are discovering. And they account for all of our free music legal competitors. And you need to find a way to make your licensing costs bearable. Something we’ve worked very hard at.

Fifth, you need to have a sure way of getting massive audience. And we are creating that sure way. By engaging the dominant sites, search engines & media players in each territory. In short, by getting off our asses, leaving the comfort of the US and talking to eager marketing partners. My partner Lance has sacrificed his home life (not to mention his golf) to take to the road with me. Interminably. As has my long suffering partner, Chai. And Robin. And Alex. Perhaps not the common way for people in our industry. But a damn effective way.

Sixth, what about the local music? If you leave the safety of your home country and pound the overseas pavements, you might notice that taxi drivers in Hong Kong listen to Chinese music, in Turkey to Turkish music, in Dubai to Arabic music etc. So it takes effort & we are just beginning but we are intent on hunting down the sources of local music in every country we’re going to be operating in. And having something other than your standard, US, ethnocentric, music service.

I could probably go onto to 20 more unique aspects of what we’re doing. But as Dylan says, “Time is an ocean but it ends at the shore” and they’re serving breakfast on this flight which means the Pacific is soon ending and land is in sight. Apart from which, there has to be something left for another monster blog or 2.

But I haven’t answered all the confronting questions, I posed and I know there’s at least one miserable soul out there who is waiting to fault me on being evasive about something.

Just a word, then, on our battles. We have had every type. Battling against an old model for the music industry. Which served it so well for so long. But which the ability of consumers to bypass the CD, rendered obsolete. If you can get music free, albeit illegally, you will. And that’s why, perhaps 95% of consumption, perhaps much more, is illegal. And if you can buy, legally, just the track or 2 you want from an album, you will. Which is why both illegal activity & legal activity are making the industry cry out for a new model. But our departure from any conventional model was radical. Too radical. And we had to battle hard for it. And we did. And did.

And we battled the complexity of licensing. Our licensing guru, Rick Riccobono went on a mission to London to sort our the insanely complex terrain of European publishing licensing. He’s got it sorted after being there for 2 grueling years.

And we’ve battled to raise money. And to raise it while being honest (if sometimes wrong). Every day for about 7 years. Every day. With the help of a team that I thank hugely. They know who they are. And the money raised has mostly been from genuine investors who have mostly remained very enthusiastic for the entire period. Which has been really more than we could expect or deserve. Much more. But also from toxic PIPES/death spiral funds (Google that!) and inadvertently from some undesirables and we’ve ended up in legal battles with several of them. And a couple of suppliers who may or may not have done the right thing by us. And sometimes, frankly, we haven’t done the right thing by others, either. Like not being able to meet checks on their due dates. And as inexcusable as that has been, one by one we have worked thru situations to ensure that everybody gets paid. Even if it means dipping into our own pockets. No hiding behind the corporate veil for us. Whether it takes personal guarantees (& exposure) or personal funds, we’ve done what is required to keep the company afloat.

And we’ve battled to remain in control of our destiny. This has been a critical and constant battle. Because everybody knows how to do it better. But thankfully our largest funders have been the wisest. They’ve known that to tame us is to destroy us. I believe we have the most talented team ever assembled to get this job done. From our office manager Teo (who has to put up with both you & us), to the IT, content, licensing, advertising & funding execs. They’re nothing short of brilliant. And dedicated, And loyal. We’re also damn unconventional and we’re going to stay that way. You think we need to become more mainstream, more corporate? Screw you.

And we’ve battled to simply exist. To keep the lights on. Not to go the way of so many others. And to survive personally. I am both proud and ashamed that management is the largest creditor of this company. You’d understand why.

And we’ve battled not to dilute the hell out of shareholders while raising funds. And somehow we’ve succeeded in this regard more than could perhaps be expected.

We are nothing if not dogged. And stubborn. And determined. And God willing, our reward & that of our large number of stakeholders, is that we are very soon going to launch a powerfully attractive music service, with leading internet & media companies as marketing partners. That have existing substantial users. And we’ll progressively roll it out throughout the world.

This is the least that you, our long suffering, supporters deserve. And while it’s perhaps more than I deserve because of how long it took me to get here, as long as there’s breath in my body, I will not rest until it’s achieved. Of that you can be certain.

–Allan Klepfisz

Michael Jackson

I’ve been paying attention to the Michael Jackson media frenzy quite a bit. Not because I was the biggest MJ fan on the planet, but because ultimately we create our own epitaph. Especially when a person is a polarizing as the King of Pop, it’s crazy to try to understand his legacy outside of individual opinion. When someone is obviously as talented as Michael Jackson is, yet so openly flawed, the ink may never dry on his obituary.

For the purposes of this post, I’m going to focus on the music and his legacy as the King of Pop. This isn’t because we’re eager to turn a blind eye to the last 10 and the controversy which encompassed his life. On the contrary. It’s not even much of a discussion if he wasn’t who he became as an artist and a performer.

For all intents and purposes, pop music has seen three or four larger than life figures that have transcended not just pop culture, but life and culture itself. Elvis, The Beatles, Michael Jackson and Madonna (debatable) sit on a short list of icons so big, that they change the rules for everyone. Whereas mega pop stars exist in a world that is music centric (like the cover of Rolling Stone) , icons like the above list lived in the fabric of everyday life (like the cover of Time magazine). However, even when you compare him to the very short list of peers, Michael Jackson’s musical accomplishments stand apart. 750 million albums sold globally. Thriller sold over 100 million copies which is more than double the next closest album. Plus, MJ has two other albums which sold over 30 million copies each (Dangerous and Bad). Only the Beatles have more than one album on the 30 million plus list, and one of those was a greatest hits (1) album. Additional accomplishments as far as number one hits, weeks on the charts, and top ten hits are right up there near the top of every category.

A lot has been written already about Michael. There will be plenty more to come. Everyone will have an opinion. There’s no denying the fact, however, that pop music will always be richer for having the talents of Michael Jackson to remember. Tragically, that’s only part of the story.