Gawker
Muxtape founder Justin Ouellette says he's shut down the mixtape-hosting website because of a problem with the Recording Industry Association of America. A statement from the RIAA itself seems to confirm the story. Bu we hear another reason Muxtape is shutting down is that it got too expensive for Ouellette to keep up.
A tipster tells us Muxtape investor Jakob Lodwick has been heard to complain that the site's hosting bill alone amounts to $30,000 per day. That figure seems absurdly high — but could our tipster have misheard Lodwick saying the bill is $30,000 a month? After Muxtape's first day, Ouellette posted the site's stats, reporting 8,685 users uploading and playing 19,731 songs over 35,000 visits cost Muxtape $118.17 with Amazon's S3 online-storage service. Extrapolate that first day over a month, at Amazon's standard rates, and you've got a $3,545 hosting bill. Compete.com confirms that Muxtape's user base has grown at least tenfold since then, making a $30,000/mo. hosting bill not just plausible, but likely.
The bill is also far more than Lodwick or Ouellette seem to have expected. In an accidentally published investment term sheet, Ouellette estimated three months of hosting would cost $18,000. That's about $72,000 off the mark, enough to eat through Lodwick's $95,000 investment and shut down the site, angry letters from the RIAA or no.
