Financial setbacks bring in Netco's Ryan as replacement
Soundbreak.com prexy and CEO Lisa Crane stepped down Wednesday, after the technology incubator that funds the company expressed dissatisfaction with the financial losses at the digital music company.
Crane will be replaced by Paul Ryan, who previously was chairman of the Netco.
Soundbreak netcasts DJs who interact with Netizens via e-mail and live chats as they play music. Last week, the Netco announced it had signed a deal with the RIAA to pay royalties each time the company used a song from a member label.
The Netco is majority-owned by Acacia Research Corp., which holds three out of five positions on the company’s board of directors. Ryan is also the chairman and CEO of Acacia.
Most of Acacia’s investments are in nuts-and-bolts technology ventures, including biochip developer CombiMatrix Corp. and Greenwich Information Tech-nologies LLC, which creates video and audio on-demand systems. Shares of Acacia closed up almost 7% at $28.25 on the Nasdaq Wednesday. Acacia’s one-year trading high was $59, reached in January.
“I look forward to working with the talented team at Soundbreak as they continue to grow their worldwide audience,” Ryan said in a statement. “Soundbreak is well funded and continues to execute on its business plan.”
Soundbreak has been a big drain on Acacia’s bottom line, according to documents filed with the Securities and Exchange Commission. For the first six months of 2000, Soundbreak cost the incubator $9.4 million in operating expenses, with a note that “these costs may substantially increase in future periods.” Acacia’s total operating loss for the first six months of the year was $16.8 million.
Soundbreak has long said it was ramping up for an offering on the stock market. However, that buzz has been dampened since tech stocks starting taking a dive in April. In a recent interview, Crane addressed the cost of doing business on the Internet, especially in light of her company’s royalty deals with the RIAA, BMI, SESAC and ASCAP.
“Essentially they’re saying that because you’re on the Internet, you have to pay something that the radio stations don’t have to,” she said. “We’re doing this in part for budgeting reasons: If I wait, I’m going to be spending money on lawyers and time talking to them, and then I don’t know complete costs until I go to (all the rights organizations). But I know what my total costs are going to be with the RIAA deal.”
Crane joined Soundbreak in September 1999, prior to the company’s launch in February. Before joining Soundbreak, she was veepee of NBCi and general manager of NBC.com. She also is a vet of Universal Studios, where she ran UniversalStudios.com as veepee of the studio’s online division.
Crane was popular on the tech confab circuit, in part because of her status as one of a select few women to top a music-oriented dot-com. She is veepee of the Los Angeles Digital Coast Roundtable, and is on the board of advisors of eStar.com and Pulse Entertainment.
(Justin Oppelaar contributed to this article.)