Loudeye Closes Overpeer Unit; Cost Trimming

Loudeye, the Seattle-based digital music/media services company, has closed the lemon it bought: it has shut down its P2P content protection/anti-piracy unit Overpeer, which it bought in 2004 for about $4 million in stock.

Loudeye expects the move to cut its quarterly cost structure by 10 percent, or $1.6 million, compared to Q3 levels. The closure will result in $200,000 in employee severance and other payroll costs that the company will pay this month.

Loudeye has been trouble, as its shares have tanked. Its B2B digital music business has gained some customers, especially in Europe (becuase of its acquisition of OD2), but the margins on that remain minuscule, at best. On the mobile music side, its tie-up with Nokia has yet to yield any major results. The company needs to act, fast…

To get more details on the challenges the company faces, check out its latest 10-Q it filed last month with SEC…

Related:

Loudeye Acquires Overpeer

Loudeye Losses Widen; Hires Bank For Sale Or Options

Digital Music Downloads – The Problems of a Next to Zero Margin Business

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