Feeds

Institutions pour $25.2m into digital music firm

Loudeye won't run out of office stationery just yet

  • alert
  • submit to reddit

3 Big data security analytics techniques

Loudeye, US parent of European digital music pioneer OD2, has won itself $25.2m in funding.

The finance will come from unnamed "institutional investors" who will stump up the cash in return for 16.8m Loudeye shares, along with the right to buy 5m more.

Loudeye said it will use the money for "working capital and any other general corporate purposes" - in other words, to maintain its day-to-day operations.

Earlier this month, Loudeye said it had extended its partnership with MTV Europe, which it took on when it bought OD2 in June 2004 for $40.5m in cash and shares. OD2 already runs MTV music download stores in the UK, France, Germany, Italy, and the Netherlands. The new deal will see stores open in Spain and Italy.

Indeed, most of the company's successes this year have come through deals struck in Europe by OD2, so the acquisition seems to have been a sound business move. However, with Q3 revenues of just $5.1m, it may take Loudeye some time to justify the purchase price. Loudeye even said that the 62 per cent increase in quarterly revenue between Q3 and Q2's $3.1m was "primarily due" to the inclusion of OD2's business. It needs to pick up business more quickly than the extra $2m a quarter gained from OD2, particularly since its loss also grew in the same period, from $2.6m to $5m.

With $25m in the bank and the addition of this latest round of funding, Loudeye can continue to cope with that kind of loss for some time to come while the revenue-generation opportunity provided by the digital music market continues to expand. It expects to be operating profitably by the end of 2005.

Loudeye is anticipating Q4 revenue in the region of $5.2-5.7m. It expects to lose $4.8-5.2m. ®

Related stories

HMV to spend £10m to catch up with Napster, Apple
Tesco opens digital music store
Woolworths to take on Apple iTunes store
Microsoft extends MSN music sales into Europe
AT&T Wireless launches mobile music store
Gizmondo UK debut set for 29 October
Nokia moves to counter Apple-Moto music alliance
Peter Gabriel sells digital music firm
OD2 clocks up 1m downloads in Q1
MusicNet to deliver music downloads to UK

High performance access to file storage

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Record labels sue Pandora over vintage song royalties
Companies want payout on recordings made before 1972
Ex–Apple CEO John Sculley: Ousting Steve Jobs 'was a mistake'
Twenty-nine years later, post-Pepsi exec has flat-forehead moment
Number crunching suggests Yahoo! US is worth less than nothing
China and Japan holdings worth more than entire company
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.