Muze Acquires Loudeye's U.S.-Based Operations
May 01 2006 - 4:05AM
PR Newswire (US)
Loudeye to Focus on Expanding Global Operations With Its OD2
Services; Deal Significantly Enhances Muze's Digital Media Service
Capabilities and Opens New Verticals SEATTLE and NEW YORK, May 1
/PRNewswire-FirstCall/ -- Loudeye Corp. (NASDAQ:LOUD), a worldwide
leader in business-to-business digital media solutions, and Muze,
the leading provider of entertainment information services,
announced today that Muze has acquired Loudeye's U.S.-based
services and operations in an asset purchase transaction for $11.0
million in cash. The transaction closed April 30, 2006. Muze
assumed Loudeye's web and mobile digital music commerce services,
operating on Loudeye's U.S.-based platform. The platform also has
the capabilities to offer portable music subscription services to
its customers. Live customers of the service are O2 Germany, ATT
Wireless mMode MusicStore (now Cingular Wireless mMode Music) and
BurnLounge. The acquisition by Muze also includes Loudeye's
encoding services, including for EMI Music customers, and music
sound samples services, along with its hosting and internet radio
services. This transaction is a further step in Loudeye's plan
announced in February 2006 to focus on its key revenue generating
customers, while substantially reducing Loudeye's cost structure.
This transaction better positions Loudeye to capitalize on growth
opportunities in rapidly evolving digital media markets, including
mobile, and to accelerate innovation on Loudeye's OD2 service
offering, which Loudeye offers globally. The success of the OD2
service has made Loudeye the #1 seller of Windows Media (WMA)
formatted full track music downloads in Europe. Muze has acquired
Loudeye's Seattle based digital media store services and online
radio commerce solutions, which enable secure downloads of digital
media content for online and mobile users. The acquisition includes
the rights to a broad catalog from the four major labels, and many
of the leading independent labels and aggregators. Muze clients now
have access to digital music and radio, as well as fully-integrated
or standalone e-commerce solutions. These services offer retailers
and other entities a "branded" digital music experience, with rapid
deployment and at a minimum of effort. The acquisition also
consolidates Muze's U.S. and European sound sample libraries with
Loudeye's, creating the world's largest label-sanctioned catalog in
the world, augmented by the deepest, most comprehensive, and most
accurate music database available today. This combination of
leading-edge technology and world-class editorial content will
enable Muze clients to greatly enhance their respective businesses
through subscriptions or downloads of digital media, all in support
of their specific business models. "We are focused on achieving
significant growth in our digital media store services globally.
The market for digital music downloads, including mobile, is
expanding at a fast pace, and we are well positioned in key markets
to capitalize on this growth," said Mike Brochu, Loudeye president
and chief executive officer. "Moving forward, Loudeye remains
committed to offering leading digital web and mobile services
through our successful OD2 platform and we look forward to further
expanding our services with existing partners as well as with
ventures in new markets worldwide. This transaction is a
continuation of our restructuring efforts to streamline operations,
align technology platforms and significantly reduce our cost
structure. The cash infusion from the deal also strengthens our
balance sheet. We will provide more information about the
transaction, together with our first quarter 2006 operating
results, on our quarterly earnings conference call scheduled for
May 9, 2006." According to Muze CEO Bill Stensrud, "Over the last
15 years, Muze has created the most comprehensive and highly-valued
database for music, movies, games and books. As entertainment
transitions from physical to digital media, this database becomes
more critical than ever before in enhancing the consumer
experience. It's always been our intent to leverage Muze's unique
asset as a foundation on which to build a world-class digital
commerce organization." He adds, "With the addition of Loudeye's
proven digital media platform, we have expanded our world-class
service offerings for our global customer base. With this
acquisition, Muze is now truly the industry's B2B choice for
digital content." With the transaction, Muze significantly expands
its global presence, with the addition of a Seattle office, adding
to its New York headquarters and offices in the U.K. Loudeye will
remain a U.S.-based publicly traded company, with offices in
Seattle, Bristol and London, U.K., Paris, France, Cologne, Germany
and Milan, Italy. The digital music service customer relationships
transferred in this transaction represented less than 2% of
Loudeye's total revenue for the year ended December 31, 2005, and
the remaining encoding, samples service, hosting and internet radio
services represented approximately 23% of Loudeye's total revenue
for the year ended December 31, 2005. Loudeye previously announced
that encoding services for EMI Music, which represented 14% of
total revenue for the year ended December 31, 2005, are expected to
be transitioned to a new service provider during the second quarter
2006. About Loudeye Corp. Loudeye is a worldwide leader in
business-to-business digital media solutions. Loudeye combines
innovative services with a broad catalog of licensed digital music
and an industry leading digital media infrastructure, enabling
partners to rapidly and cost effectively launch complete,
customized digital media stores and services. For more information,
visit http://www.loudeye.com/. About Muze Inc. Muze is the leading
provider of tools and information used to connect people to art,
education, and entertainment. Since 1991, Muze has provided the
most comprehensive and accurate entertainment content available. In
stores, at home, and on the go, Muze content drives the media
experience by providing detailed information about entertainment
products, turning browsers into buyers. Nearly 700 companies
worldwide rely on Muze's rich entertainment content. Muze provides
solutions to a vast array of markets and verticals, ranging from
in-store and online retail, portals, community sites, auction
sites, and consumer electronics. Clients include Yahoo!, eBay,
Tower Records, Best Buy, Overstock, Pricegrabber, Amazon, MSN,
RealNetworks, BurnLounge, CNET, Virgin Megastores, Transworld
Entertainment, goHastings.com, and many others. Muze is based in
New York City, with European offices in London. To learn more about
Muze, please visit http://www.muze.com/ and
http://www.muzeeurope.com/. Forward Looking Statements This release
contains forward-looking information within the meaning of the
Private Securities Litigation Reform Act of 1995. The
forward-looking statements in this release are based on current
estimates and actual results may differ materially due to risks,
including the possibility of adverse changes in the market and
growth projections for distribution of digital audio and video that
Loudeye serves; adverse or uncertain legal developments with
respect to copyrights surrounding the creation and distribution of
digital content; pricing pressures and other activities by
competitors; the failure of hosting infrastructure; the complexity
of digital media distribution services and delivery networks; any
problems or failures in the structure, complexities or redundancies
of Loudeye's network infrastructure; failures in third party
telecommunication and network providers to provide required
transmission capacity; lack of market acceptance for Loudeye's
products and services; risks relating to Loudeye's ability to
continue as a going concern; and other risks set forth in Loudeye's
most recent Form 10-Q, Form 10-K and other SEC filings which are
available through EDGAR at http://www.sec.gov/. These are among the
primary risks we foresee at the present time. Loudeye assumes no
obligation to update the forward-looking statements. DATASOURCE:
Loudeye Corp. CONTACT: Media/Public Relations, Karen DeMarco,
kdemarco, or Ariel Carpenter, , both of mPRm, +1-323-933-3399, for
Loudeye; or investor relations, Chris Pollak, +1-206-832-4000, or ;
or U.S., David Orban, +1-212-824-0349, or , or Europe, Doug
Marshall, +44-0-20-7566-8216, or , both of Muze Web site:
http://www.muzeeurope.com/ Web site: http://www.muze.com/ Web site:
http://www.loudeye.com/
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