Musician, Technologist, Investor, Advisor. Founded DreamHost in college with $1100 from a co-founder's Mom to buy a server. 16 years later, thousands of servers, hundreds of thousands of customers, millions of websites, still self-funded and employee owned. This is only the beginning for the Internet.
I don't know any specifics about how these companies do things, but this part of what they do doesn't seem like it'd be especially hard. The various music service APIs provide ways to search their libraries for a string so you could do a reasonable first stab that way. Youtube's API provides the metadata so as long as the video has accurate metadata you can search on that.
First, this is a tough spot you’re in. By making it this long you’ve already accomplished something most people never do.
My own company was bootstrapped and we’re in our 16th year now. We’re still employee-owned and have no outside investors. Looking back, there have been trade-offs to doing things the way we have but a major benefit is the very high degree of flexibility in how we do things.
As I’ve been thinking about your problem, the biggest question for me is what changed between 2012 when you were doing well and now? It sounds like you’ve dealt with the patent troll, so what else changed? Do you have new expenses you didn’t have before? Did your product become stale while you were distracted? Did a market shift disrupt your business model? Are you different yourself?
To reboot the business and keep it running, you may have to rethink your whole product and cut out parts that feel critical to you today. You said you have some well-funded competitors so you need to focus all of your energy on whatever your company can do that is better than everybody else, and make it the best it can be. Focus on whatever generates the most cash for you (vs revenue). If there is part of your business that’s bringing in revenue but not cash flow, kill it or raise prices. Cash flow is everything when you’re bootstrapped.
If you are only having a short-term cash crunch but are otherwise cash flow positive, then a business loan or debt of some sort could be an option. Giving up equity isn’t the only way to bring more working capital into a business. It’s much easier to get someone to give you money when you don’t need it, though.
In general you don’t have to go the bankruptcy route unless you owe people money you will not be able to pay back. If you just can’t afford to keep your own lights on but don’t owe anyone else money, there’s nothing to do but just shut the lights off.
With more details, I might have more specific ideas.
The best technology is whatever gets you up and running the quickest. You'll throw away the first iteration (and possibly the second and third...) anyway. What you need most in the beginning is to test your idea and get feedback, and you need it fast.
Web development Linux bootstrapping SaaS Cloud Computing Music Technology MySQL Apache Perl Internet Infrastructure