Carriers and content providers descended on Miami for the Mobile Music Conference last week, but at least one company was conspicuous by its absence. MusiKube, a New York-based mobile music marketing company, had reason to stay home: it is possibly being eyed by a suitor.
“They’re rumored to be a candidate for acquisition by a Japanese company,” said Seamus McAteer, a senior analyst with wireless research firm MMetrics.
At last year’s MobileMusiCon, the company walked away with top honors for best mobile music application. And MusiKube made news in March when it hosted a concert by singer Alanis Morissette at the CTIA show in Atlanta to launch its music-recognition product.
Since then, though, MusiKube has been quiet. Sunjay Guleria, the company’s vice president of marketing, declined to comment on any possible acquisition, but said he hopes to come forward with more information in the next few weeks.
“There are some activities I can’t talk about yet,” said Guleria, “but very shortly we will make an announcement about where things stand. There will be changes at the corporate level and there will be an exciting product announcement.”
At least one Japanese firm would appear to have both the cash and the inclination to be a candidate for a partnership with MusiKube. Aggregator For-side.com Co. has made several moves in the U.S. market, most recently picking up Vindigo, a New York-based content provider, for $36.5 million in cash.
Another possibility is WiderThan Co., a sister company of Korean carrier SK Telecom that announced just last month its acquisition of content and messaging company Ztango.
While venture capital continues to pour into mobile content providers, being acquired by an investor with deep pockets is likely a better move for MusiKube, McAteer said.
“MusiKube hasn’t had a whole lot of success-let’s be honest. Sure, they may have been able to go out and get another round of funding, but in a crowded market, the sort of valuations they could have looked at would not have been that healthy without having a lot of commercial success behind them.”
Industry insiders say such partnerships are likely to increase as well-heeled veterans from more mature mobile markets in Asia try to put their experience to work in North America and Europe.
“I think you’re going to see more cross-border acquisitions as folks from Korea and Japan look to utilize their experience and relationships here in the West,” Michael King, a principal analyst for Gartner Dataquest, said last month.
Consolidation may be needed more in the mobile music industry than anywhere else in wireless content. Artists, record labels, aggregators and carriers are all struggling to develop a viable business model that all parties can agree upon.
“There are different pieces in the value chain people need to focus on (in mobile music),” MusiKube’s Guleria said. “The larger entities can bring real consolidation end-to-end to mobile operators.”
