Bandbox founders, clockwise from lower left: Jim Cook, Brendan Wovchko, Mike Taylor, Brian Peterson

The cycle of life and death has killed PassAlong Networks, but has given fresh impetus to Bandbox and other Nashville startups.

First, the obituary:  Dave Jaworski, the founder and former CEO of Franklin-based PassAlong Networks confirmed today PassAlong company is officially "dead" and he is pursuing new ventures.

Jaworski got local and industry attention with plans reported by VNC in December, by which he hoped to raise another $30 million for PassAlong, which had earlier attracted $40 million.  As the economy waned last fall, at least one investor was forced to renege and the domino effect kicked in. Soon, thereafter, investors put one of their own in charge of PassAlong operations.

The company that once boasted nearly 100 employees and a headquarters in The Factory complex in Franklin is now history. The PassAlong website is gone, and Jaworski spoke this morning of having learned "lessons from my lumps."

Now, Jaworski (at left) is ramping-up Provident Ventures Interactive, a holding company based here, for which he is now raising money.  Jaworski said Provident Ventures holds no intellectual property from PassAlong.  He said he has been joined in the venture by Skip Franklin, who spent nearly six years alongside Jaworski at PassAlong.

Jaworski indicated he believes rapid advances in technology will allow him to employ third-party technology, rather than building new infrastructure, as PassAlong was compelled to do.

Equally important, if he's right, Jaworski expressed confidence that rapidly evolving technologies will enable his Provident ventures to surmount what he regards as the continuing rear-guard resistance of major music labels, where he believes refusal to look beyond iTunes is as deeply entrenched as ever. 

As he occasionally vowed in public during the past past three years, Jaworksi said he will continue to be headquartered in the Nashville area.  As a permanent resident, and in keeping with Nashville's generally open-doors culture, Jaworski said he has begun informally sharing his "lessons learned" with local tech entrepreneurs he networks with.

Jaworski said one of those entrepreneurs he meets over coffee is Brian Peterson, a 31-year-old Nashvillian who has been making his own splash as co-founder and CEO of Bandbox (registered with the state as Radiagent, LLC).

Peterson's Bandbox is a tech startup that e-distributes performers' music with no charge to the artists or their labels.

Given the "free" component of the Bandbox business model, and the crash of PassAlong so close to home, it's perhaps not surprising Bandbox won't reveal to outsiders where they stand on revenue, profits, products- and partnerships-in-the-offing and other details.

Peterson's penchant for keeping his cards close to his vest was underscored when during an interview with VNC, he declined to say how much he paid to buy the Bandbox.com web address from the squatter who owned it.  Peterson would only say of the cost:  "It wasn't small."

He also declined to provide numbers of artists, customers, visitors and the like.  However, when pressed, Peterson said in an e-mail that Bandbox is now installed on "thousands of venues across the Internet (including .coms, MySpace, Facebook, blogs, radio station websites, retailers, etc.)."  He added that "the Bandbox network has received tens of millions of impressions since our beta launch (yes, millions)..."

Peterson said the company is targeted to break-even this fall, and has thus far been funded by "a couple dozen" friends, family and wealthy individuals.  He said he's begun early talks with potential Angel and VC investors here, but more contacts are being made on the West Coast, and in such money centers as New York and Denver.

He's taking it one step at a time, he explained, because "we feel like there's a little ways to go with our revenue, so that we can have a valuation that we can feel comfortable with." 

Nodding to the reality of the current funding environment and the power investors have in a "buyer's market," Peterson also emphasized, "we're not crazy entrepreneurs that are looking for this crazy valuation."  He then stressed that he and "a lot of smart folks that have surrounded us" are going the extra mile "taking the risk out for these larger investors," and the company should be valued accordingly, when the time is right.

Despite it's coming-outa-public-beta status, Peterson's Bandbox has begun earning both revenue and Street Cred during its 14 months of operation.

For starters, there's the fact that the Bandbox platform has been adopted by marketers working for Keith Urban, Taylor Swift (at left), Jewel, Paula Abdul, Reba McEntire and other performers.

In addition, Bandbox currently enjoys endorsements by such industry professionals as Big Machine Music's VP Sales, Marketing & Interactive Kelly Rich, whose testimonials are used liberally in Bandbox promotion. 

Big Music's Rich did not hesitate during an interview with VNC to praise the Bandbox folks, their technology and their business model.  She wouldn't say, however, what Bandbox services are worth to Big Music . She did say that Bandbox is now available for all Big Machine and sister-label Valory Music clients, with the most recent adopter being Reba McEntire's team.

Rich also stuck-by her earlier quote, which is now a staple in the Bandbox media kit:  "Taylor [Swift] is an established leader in the online space and her fans are highly engaged. Her active fan network will help spread the widget to all corners of the Internet, essentially providing a Taylor-branded 'end cap' on countless web sites."

The "end-cap" reference is a bell-ringer for the retail-savvy:   In the context of websites, the virtual "end cap" is an attention-getting clickthrough-generating device, the online equivalent of the end-of-aisle display for bricks-and-mortar retailers. End-caps and earlier devices are getting greater attention among online music marketers who operate "virtual storefronts" with "virtual shelves," etc., and who are looking for ways to measure the value or return they get from online marketing.

The actual business part of Bandbox begins when an artist puts the Bandbox widget on a site the client controls and accepts the Bandbox deal:  Free-to-the-artist electronic distribution of music to your fans who buy your music online, and free distribution of electronic press kits to news and entertainment media.  In addition, Bandbox will consider sharing profits with clients, if they help develop advertising revenue.

Revenue begins to flow to Bandbox as the company piggybacks sales of physical merchandise to consumers, plus sales to clients of advertising and Bandbox premium technical, analytical and promotional services.  Early in 2010, Peterson said, Bandbox may launch a new interface for application developers, allowing them to introduce new features for Bandbox.

Bandbox's chosen market could get much more crowded, as investors recognize the opportunities associated with eliminating the middlemen from music sales.  Peterson said Bandbox competitors already include – beyond such obvious players as iTunes and Amazon.com – seven-year-old Snocap (San Francisco, owned by imeem); Musicane Corp. (Venice, Calif.); and, Topspin Media (Palo Alto).

In addition to Peterson, who has deep prior experience with both EMI and SONY BMG, the Bandbox management team includes:

• Brendan Wovchko, chief technology officer, whom Peterson said is a “social networking expert," a consultant to similar firms here and abroad and a product developer for Bandbox and other Internet startups.
• Mike Taylor, chief operating officer, whose experience includes heavyweight contract services and consulting for United Kingdom-based Music Ally.
• Frank Pazera, who serves part-time under contract via the firm in which Pazera is a partner, TechCFO. He has prior experience with MCI and Arthur Andersen.
• Jim Cook, who is senior vice president for artist relations, with prior service as a studio owner, producer and musician in Nashville.  ♦