Muze Acquires Loudeye's U.S.-Based Operations

May 02, 2006

Loudeye Corp., a provider of business-to-business digital media solutions, and Muze, a provider of entertainment information services, has announced 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. 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.

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 catalog from the four major labels, and many independent labels and aggregators. Muze clients now have access to digital music and radio, as well as fully-integrated or standalone ecommerce solutions. The acquisition also consolidates Muze's U.S. and European sound sample libraries with Loudeye's. 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.