Thumbplay to dissolve, sell music segment to Clear Channel
updated 11:25 pm EST, Mon February 28, 2011
Ringtone business to be handled in separate sale
Thumbplay has reportedly failed to fetch enough subscribers to justify continuing forward, leading the company to sell its music subscription service to Clear Channel Radio. Although the company had better luck with its ringtone business, that too will be sold in a separate transaction that has yet to be publicly tied to a specific buyer.
The terms of the deal remain unclear, though unnamed sources have told the Wall Street Journal investors do not expect to be compensated for the full $41 million in original funding that was put into the endeavor.
Thumbplay's technology will reportedly be used to improve Clear Channel's "iheartradio" streaming radio service. The transaction is said to involve Thumbplay's full staff of 65 workers, all of whom will reportedly receive jobs at Clear Channel to help reintegrate the technology.
Clear Channel investor and chairman Bob Pittman suggests the buyout will not affect existing Thumbplay subscribers. The company will not immediately sign up new customers, however Pittman admitted that Clear Channel may eventually engage a subscription-based model.
