SeeqPod, the popular “playable media” search service that many music sites use as the foundation for their core offering, has filed a petition for Chapter 11 yesterday with the U.S. Bankruptcy Court of the Northern District of California.
The company, which has raised $7 million in venture capital to date from undisclosed investors, is evidently doing this out of fear for the outcome of the multibillion dollar lawsuits it was slapped with by music labels like Warner Music, Capitol Records and EMI.
We reported earlier that SeeqPod had become quite the target for the music industry, who went so far as going after developers who merely leveraged the SeeqPod API. They silenced Songbeat and forced Streamzy to put itself up for sale on eBay as a result.
SeeqPod has developed interesting and powerful technology that is able to quickly crawl the web for playable media (MP3s, slideshow presentations, videos, etc.) and enables users to play it on-site. It doesn’t actually host any files on its servers, but the downside of the technology is that the crawling engine picks up on pirated music files from across the Web too, which is why the music labels are so eager to sue the company behind the service, especially since it spawned so many third-party services who use the engine as the basis of their online offering.
It’s worth noting many search engines index copyrighted material too and are shielded from legal actions against them under the DMCA, so it seems rather unfair that the music industry is picking on SeeqPod specifically (the startup is waving with the DMCA protection too). Maybe this is because of the fact that SeeqPod enables visitors to play files directly, and because has reportedly been slow in setting up negotation talks with the labels.
SeeqPod recently started selling its source code to developers (price tag: $5,000) in the hopes of creating a legion of ‘mini-SeeqPods’ which could impossibly be killed by the music labels one by one, but it’s unclear if this strategy has paid off so far, and yesterday’s Chapter 11 petition doesn’t bode well for the startup (and its investors).
To be continued.
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