A weekly recap of the latest news on the CNBC Disruptor 50 companies upending the status quo in the markets.
No peace for Spotify
Radiohead and Atoms for Peace frontman Thom Yorke is part of a move by musicians to pull their music from Spotify, among other online music services, arguing it's a bad business model for the artists. Yorke's Atoms for Peace withdrew its catalog from Spotify this week in protest at the amount of money musicians are able to make from the streaming music service.
Spotify contended in a statement to CNBC that it is doing everything it can to support young artists. It said it has already paid $500 million to rights holders and by the end of 2013 will have paid pay out $1 billion, money invested at least partially in new music and new musicians.
Meanwhile, Yorke's band has partnered with British start-up Soundhalo for downloading of live tracks and videos.
As the furor grew over the decision, Yorke tweeted, "Not enjoyed being target for facile mudslinging we've the right to discuss and optout of #Spotify. debate is important."
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Kabam's value is exploding
The latest valuation for video-game maker Kabam pegs it at $700 million, based on a $38.5 million secondary offering for employee shares completed this week.
Kabam stressed that none of the money was going to the company, and was an opportunity for employees to sell their shares. "Financially, Kabam is remarkably solid," CEO and co-founder Kevin Chou said in a statement. Kabam has more than $50 million of cash in the bank and expects to grow revenues to more than $300 million this year, the company stated.
And in the latest Aereo legal development …
…Victory! Sort of. In a setback for the growing list of broadcasters that have sued Barry Diller's IAC-backed Internet TV pioneer Aereo, a U.S. appeals court declined Tuesday to rehear an appeal by the major broadcasters seeking to temporarily shut down the online television start-up. Walt Disney Co.'s ABC and Comcast Corp's NBCUniversal (owner of CNBC) were among the broadcasters bringing the suit. Last week, Aereo was sued by the ABC affiliate in Boston, owned by Hearst, after the launch of its service in Boston.
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In news of interest to the CNBC Disruptor 50 companies:
Who will dominate television?
While Aereo prevails (for the time being) in court, and Netflix messes with the Emmy race, just about all the major tech companies want their piece of the TV action.
Google recently spoke with media companies about licensing content for an Internet TV service to stream traditional TV programming, according to several press reports published this week.
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Meanwhile, Apple is working on technology that lets viewers skip commercials and that pays media companies for the skipped views, according to a blog post by a former Wall Street Journal reporter. For more than a year, the company has been seeking rights from cable companies and television networks for a service that would allow users to watch live and on-demand television over an Apple set-top box or TV.
All the unbundling of TV content through streaming viewership could cost the pay-TV industry as much as half of its annual revenue, or $70 billion, according to an analyst with Needham & Co. who views the latest moves as a potential disaster for traditional TV.
iWatch slated for 2014?
Several of the CNBC 50 Disruptor companies, including Audax Health, are focused on engaging people in a more active, healthier lifestyle through monitoring tools, wearable devices and mobile applications. The Financial Times reported this week that Apple is "aggressively" hiring new employees to help with its smartwatch effort, but the much-hyped product—which the company has never even confirmed—may not appear until late next year.
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And in CNBC Disruptor 50-related people moves:
Wealthfront adds financial guru to board
Charley Ellis, founder of Greenwich Associates, a consulting firm to the financial services industry, has joined Wealthfront as a member of its advisory board.
Ellis previously chaired the investment committee at Yale University and served on the Vanguard Group board of directors for almost a decade, among many positions in a 50-year career in financial services.
Among Charley's books is "The Elements of Investing," co-written with Burt Malkiel, Wealthfront's chief investment officer.
—By Eric Rosenbaum, CNBC.com