Disgrace! The result of unhealthy competition Ecast

In the startup environment, it is a habit to talk about successes to keep our hopes alive for the future, but it is a big mistake to forget the failures of the past and not benefit from the experiences of the past. For this purpose, the Ecomotive team has collected the experiences of a series of failed startups, so that reviewing their failed stories may be a basis for the success of new startups in Iran’s startup community. This collection will be published and made available to the audience in the form of the story of failure. We review the thirty-first part of this series, which deals with the story of the failure of the Ecast startup.

By combining the personal impact of touch with the power of Internet engagement and targeting, Ecast has brought its customers unparalleled access to out-of-home markets and redefined how customers are entertained, informed and engaged.

This media company had several interactive services. The Jukebox service delivered location-based advertising, music, games and information to bars and nightclubs in the United States. Smart Solution which was a touchscreen software platform. Smart Mall provided customers with up-to-date and expert content on the latest brands and fashions, and Smart Transit, which was a content and promotional service.

In late 2001, the company was involved in a legal dispute with Touch Tunes over the license of its activities. Each of these companies accused the other of unfair trade, violation and deceiving the customers of the other company, and they accused them of losing their trust. This dispute finally led to an agreement between the two companies and withdrawal of their complaint.

In September 2005, the United States Attorney General filed a civil antitrust suit against Ecast and NSM Music Group. According to the complaint, the 2003 agreement between the mentioned companies was a violation of Article 1 of the Antitrust Law, because according to the agreement between the two companies, NSM was only allowed to produce hardware for Ecast and, in exchange for receiving additional money from this company, from running the programs. The other was banned from entering the American market. According to the order of the Attorney General, two companies ended this non-competitive agreement.

In 2009, Cohen – the CEO of the company – was accused of deceiving investors and taking more than 28 million dollars from them, because he claimed that Microsoft was going to buy the company, and they had bought shares in this hope. In August 2010, Cohen was indicted by a federal grand jury on 15 counts of wire fraud, 11 counts of money laundering, and 3 counts of tax evasion.

On March 1, 2012, Ecast ceased operations following the discontinuation of the Jukebox Network. After the company failed to attract enough capital to continue its activities, the board of directors voted to stop the activities immediately. A little later, the company’s phones and email were closed.

Following the discontinuation of Ecast services, AMI Entertainment Network and TouchTunes Interactive Networks announced that they will provide replacement facilities for customers who no longer have access to Ecast services.