The Madison-based music startup’s “close-out” looks pretty bad for people who sent in their music for digitization.
When Murfie announced on November 22 that it would cease operations, its users online began wondering aloud about how and when they could retrieve all the CDs they’d sent to the Madison-based music startup to digitize and make available for streaming and trading. The company’s Facebook and Twitter profiles seem to have vanished, it’s no longer possible to log into the site to manage your music collection, and reporters covering Murfie’s abrupt demise (myself included) haven’t had much luck actually reaching people at the company. Murfie itself is being quiet, but everything about the situation screams that something really screwy is going on.
It’s only getting more screwy. On Friday afternoon, Murfie’s “Close-out Team” emailed customers to let them know that they could get their CDs back if they filled out a Google form by Monday, December 2 and paid a fee to have the CDs retrieved and shipped back. How much? “To estimate your approximate cost use the formula: $100.00 plus $0.45 per disc,” the email said. “Actual cost that will be invoiced to you will vary as it is subject to the labor required to extract and assemble your discs.” It sounds like people who had money in their Murfie accounts from selling music on the service will not be getting payouts, either.
This gave customers the space of a holiday weekend to ask for their CDs back, and it’ll cost most of them probably more than most collections on there were even worth. Following a rash of complaints (several customers reached out to Tone Madison over the weekend to express their ire, and others criticized the company on Twitter), Murfie sent out another email on Monday extending the deadline to Thursday, December 5. It also stated that Murfie would try to arrange for Madison-area customers to pick up their CDs in person and save on shipping costs, “if we can obtain the permission of the landlord.”
Customers didn’t have enough notice to retrieve their music from Murfie in digital form, either.
Friday’s email to customers helpfully noted that “The company is insolvent (has no money) and has been dissolved. Assets remaining have been assumed by Murfie’s secured creditors,” which implies that Murfie and its main investor, WISC Partners, didn’t set aside funds to cover the cost of a shutdown or even make much of a plan for this situation.
The email makes this process sound like a comical ad-hoc affair: “Unfortunately Murfie’s financial situation precludes any ability to reimburse customers for unused portions of subscriptions or for any Murfie credits that may have accumulated. Murfie’ secured creditors have joined together with a few former Murfie customers to informally aid customers seeking return of their CDs. Since Murfie’s debt obligations far exceed cash on hand, any return of customer media must be funded by the customers themselves.”
Personally, I began sending CDs in to Murfie when I first heard about the company in 2011, mostly as an experiment. So even though I still like CDs quite a bit, I don’t think Murfie currently has anything of mine that I value very much. In fact, wasn’t even aware that the company was still in operation until a few weeks ago, when I got a “trade request” from another user to swap something in my collection for something in theirs. But for people who were excited about Murfie’s initial pitch to customers—to get your CDs out of your way and let you enjoy them digitally in lossless audio formats without the hassle of ripping and converting them yourself—this has got to be infuriating.
Preston Austin, who co-founded Murfie in 2010 with fellow serial entrepreneur Matt Younkle, has not been directly involved in the company for a while and was surprised to hear about it shutting down, but takes a forgiving view of the shipping costs. “They are, I would guess, totally illiquid and insolvent and nervous and ensuring cash collected covers cost and probably about need to vacate spaces before eviction and whatnot,” Austin says, adding that he has CDs of his own in Murfie’s warehouse and plans to pony up to get them back. Having done some rough math on the matter, Austin describes the shipping charges as “neither ideal [nor] usurious.”
It’s clear that until pretty recently, at least some folks at Murfie thought the company still had a future. An email sent to customers with dormant accounts like mine on November 17 asked us to sign up for Murfie’s new membership program and offered to ship back CDs, stating that “bulk rates start at $10.00 + 0.39 per disc.”
Whoever is still at Murfie have not replied to requests for comment. WISC Partners’ David Guinther did respond to an email inquiry over the weekend, but thus far has declined to comment on the record. We’ll update this story if they do. If you’re a customer or former employee who’d like to discuss your experiences, email me.
