San Francisco - Sonific, a provider of licensed music widgets and free music applications for social media, said on Tuesday that it will take its service offline "as a consequence of the unworkable music licensing situation and the resulting lack of solid revenue modeling," co-founder and CEO Gerd Leonhard wrote in a note on Sonific.com. The company had attracted 80,000 users to its service and amassed a library of over 200,000 licensed songs.

However, Leonhard said that acquiring major label music for the service would have required the company to pay "very large cash advances" and even provide equity in exchange for licenses.

Otherwise, the company could choose to either move forward either without "hit content," upsetting users, or just add songs without licensing them -- drawing many users, and making the company an acquisition target for someone with deep pockets who could pay any resulting copyright lawsuit damages.

"We neither want to engage in so-called copyright infringement nor do we have millions of dollars available to buy our way in when it is abundantly clear that doing business under the existing rules of the major labels will simply amount to economic suicide," Leonhard wrote.

Sonific said it is open to talking to any interested party that may have use for its user base, content relationships, technologies or distribution network.

Related Links:
http://sonific.com/home/offline

http://gerdleonhard.typepad.com/songspotting