Nearly three weeks ago, we updated you on our investigation of Datz - heralded at launch by the technology press as a new eat-all-you-want subscription model for the music industry. It involved punters buying Datz Music Lounge – a CD ROM and a USB stick combo – for £99.99, either in-store at Sainsbury’s or elsewhere online. This entitled the user to download unlimited music from tens of thousands of artists for a whole year.

Then it all started going wrong. Last month, a reader told us that the major artists promised by Datz had disappeared from the online store; Datz seemed to have lost the rights to libraries from EMI and Warner. We then went digging into the history of Datz and uncovered a spider’s web of debt and administration – at the centre of it, the man on the right, Datz MD Michael Richardson. Despite been unable to provide the service as sold, Datz continued to sell the product online for full price, while Sainsbury’s continued selling it at a discount.

So three weeks on, where are we? The only update is that the Datz Music Lounge has now shut down altogether. We’ve made several calls to their offices since our last post and they continue to go unanswered. Their former press representative at XL Communications won’t provide any information as he no longer works on behalf of Datz.

What about Sainsbury’s? We initially contacted the press office on 20th August and raised our concerns – that the product was unable to satisfy its own claims as sold, and should be removed from stores as to sell it would mislead customers. In total we have now contacted Sainsbury’s three times – each time explaining the situation to their press office to determine what action they were taking and to provide a statement, and each time they have failed to return our call. Today we read in the HUKD forums that a branch of Sainsbury’s was still selling Datz Music Lounge last Thursday, although it had been discontinued and heavily discounted. Sainsbury’s had been aware of the product’s misleading claims for a fortnight – the supermarkets had no right selling the product at any price because it didn’t work.

Since Datz Music Lounge only launched at the end of last year, everyone who has bought it has lost out on their 12 month subscription. The scandal is that nobody involved in this seems concerned that Datz have probably taken tens of thousands of pounds and ran, least of all Sainsbury’s. You could try returning it to the original retailer since it clearly isn’t fit for purpose for the duration of use. And keep an eye out for Michael Richardson – he’s no doubt keeping a low profile.

When a new online music service is heralded as “a really big deal“ at launch, we usually tend to notice – even in our dungeon of an office here at Bitterwallet. So when we receive an email about the Next New Future Of Music™ and we haven’t heard of it, then either we really need to get out more or it provided a less rosy vision of the future than advertised.

The Datz Music Lounge – “what every music lover has been looking for” – launched in October last year and received a modest amount of press. It certainly promises plenty to satisfy music fans – for a one-off payment of £100, you can “download as many tracks as you want from a choice of millions”, all of which are DRM free. Above all else, Datz promises the music was “100% legal, 100% original.”

Despite early reviews suggesting the set-up procedure involving a CD and a dongle was a little painful, it was generally accepted this new revenue model for online music was worth giving a chance. And widespread product availability through Sainsbury’s and Firebox probably means it has several thousand customers, all expecting free music downloads from well-known artists for a full 12 months. Except something seems to have gone wrong, at least according to Bitterwallet reader Geoff:

Having purchased a year’s subscription to this all you-can-eat MP3 service some seven weeks ago from Sainsburys at the bargain price of £29.99, I have been busily building up a substantial catalogue of albums and have been generally pleased with the availability of tracks from the Warner Brothers archive (e.g. Madonna, REM, Grateful Dead, Jackson Browne, Red Hot Chilli Peppers). At the time I purchased however I noticed that the promised artists and tracks from the EMI catalogue appeared to no longer be accessible.

On Friday last, the service was terminating with SQL errors against all tracks. It now shows a substantially smaller number of artists, with all Warner and most independent labels no longer represented. Image links are also broken. The impression given is that the company no longer has access to ANY of the promised major artists.

Our first thought was that given the low price paid compared to original launch price just seven months ago, Geoff had purchased a limited trial of the service, but he’s not the only customer having problems; having looked through the types of tracks available, we have to agree with Geoff’s assessment. This is a random selection from the Pop section, and is typical of the genre listings as a whole:

Browse through the entire catalogue and you’ll spot a handful of names you recognise, but they’re hardly prime examples of their genre and they’re lost in a sea of artists and recordings that have never troubled public consciousness. You’ll find songs from Kylie’s and Madonna’s back catalogue, but they’re karaoke and “tribute” versions – that suggests Datz still has agreements with the major music publishing companies (which gives them access to a particular song) but not the major record labels (which would give them access to a particular artist’s version of that song). The “100% original” claim seems to have been mislaid.

There are other indications all isn’t going well at Datz:

• their website states that the product is still available to buy from both Sainsbury’s and Firebox – except Sainsbury’s has no mention of Datz on their site and in the case of Firebox, “this product is no longer available.”

• there have been some desperately priced deals on offer recently to flog the package; cutting the retail price by four fifths just six months after launch surely wasn’t part of the original business plan, was it?

The questions that need answering right now are:

• is Datz in trouble? If not, what’s happened to all the music that was seemingly available a week ago? If they are in trouble, why is the Datz Music Lounge website still selling the product?

• what happens to customers who paid for a 12 month service that now appears to be selling them seriously short on the original promise?

Unfortunately, the answers are rather harder to come by. We tried to talk to Datz this morning, but found that the head office number on their contact page is never answered. We contacted 24-7 Entertainment who appear to supply Datz with their music catalogue, but they refused to comment on the matter. We’re now waiting for their press representitive at XL Communications to return our message. In the meantime we’ve contacted Firebox who did comment – they told Bitterwallet that the website decided to stop selling product on the 18th of December, although they continued to sell remaining stock after this date. Usually Firebox stop selling product because of poor sales or because an upgraded product is due on the market – neither appears to have been the case, according to the Firebox representative.

There may be some reasonable explanation for all of this, but then you’d think somebody at Datz would be willing to tell us. We’ll keep you up-to-date with any new developments.