Business Matters: PreSonus Acquires Nimbit, Ushers in New Era in Direct-to-Fan Sales

Business Matters: PreSonus Acquires Nimbit, Ushers in New Era in Direct-to-Fan Sales

Business Matters: PreSonus Acquires Nimbit, Ushers in New Era in Direct-to-Fan Sales

PreSonus Acquires Nimbit, Shaking Up Direct-to-Fan
Call it Direct to Fan 2.0: Nimbit, the Boston-based provider of direct-to-fan music services, announced Thursday it had been acquired by PreSonus, a maker of professional hardware and software equipment based in Baton Rogue, Louisiana.

The deal actually closed April 30, according to Nimbit CEO Bob Cramer, but the announcement was put off until the two companies' products were fully integrated.

Nimbit was part of Direct to Fan 1.0, an era in which startups sprang up to offer suites of tools for artists and labels to sell directly to fans. Companies such as Nimbit, Topspin Media, VibeDeck, Bandcamp and Gumroad have been built to disrupt traditional retail, empower musicians to work independently and take advantage of digital marketing.

The 2.0 era will be characterized by vertical integration, or the combining of companies in a way that takes advantages of their capabilities (the phrase "greater than the sum of their parts" should apply to a good vertical integration). Today's direct-to-fan services occupy only a segment of the supply chain. That will change as companies merge to take advantage of greater scale and position themselves against their competitors.

In this case, a company that builds music creation tools (PreSonus) has acquired a company that builds tools for selling and marketing music (Nimbit). It's a sensible merger. Both have built-in audiences. Both bring potential synergies to the table. PreSonus can guide music creators to Nimbit while Nimbit can guide musicians to the creation tools of PreSonus.

The addition of Nimbit is "a natural fit" and reflects how the creation process has changed, PreSonus CEO Jim Mack tells Mack says PreSonus has been looking at ways to get its products more connected with the Internet. It was an early adopter of SoundCloud's API when in 2010 it integrated SoundCloud export into its PreSonus Studio One digital audio workstation.

Mack says PreSonus is also looking for ways to allow its customers to directly make money from their creations. Now a customer such as a church can use PreSonus tools to record a service, upload the recording to a Nimbit account and sell it as a download in an easier series of steps. An artist can use a digital audio workstation to create and sell a song using a single company's products.

Nimbit clients won't see any changes, says Cramer. "It's exactly the same product. We've made no change to our strategic direction." In fact, Cramer adds, Nimbit will be run as a wholly owned subsidiary and will continue to operate out of Boston.

Nimbit also announced the launch of NimbitPlus on Thursday. NimbitPlus is a $9.95-per-month service that includes CD sales (including pick, pack and ship services), additional artist store customization and promotional tools, and free distribution to iTunes and Spotify. Those features are not available in the free-of-charge NimbitFree tier that launched last year.

How Are Cyber Lockers Still Legal?
Fortune's Roger Parloff poses a question that has certainly been asked around the music industry: "How can it be that 11 years after the court-ordered shutdown of Napster, nine after that of its first cousin Aimster, six after those of offspring Kazaa, Grokster, and Streamcast (blessed, in the last two cases, by a unanimous U.S. Supreme Court), and two after LimeWire's -- that there can be any lingering doubt about the illegality of overwhelmingly infringing sites like Megaupload?

Parloff's excellent article on Megaupload and the legal system that enables cyberlockers is mandatory reading for people in the content business. Cyberlockers -- a name that incorrectly implies anything is actually kept away from outsiders -- exist mainly through the courts' longstanding interpretation Supreme Court's Sony Betamax decision: the services are legal because they have substantial non-infringing uses. While file-sharing services such as Grokster and Limewire also had non-infringing uses, executives became ensnared by their direct knowledge of infringement -- a no-no under the DMCA.

Cyberlockers' ignorance defense has worked well. Ignorance, not whether or not measures to stop piracy are being taken, is their golden ticket. "They are the simplest, most colossal, most profitable piracy bazaars the world has ever known, and yet, under the letter of our current laws, they might be lawful," Parloff writes. (

Spotify's American Anniversary Is Tomorrow
Digital music has a big anniversary this week: Saturday marks one year since Spotify's July 14, 2011 launch in the U.S. The service launched to the public in the U.K. and Sweden in early 2009 and later debuted in France, Spain, Finland, the Netherlands, Norway, Belgium and Austria. More recently, Spotify expanded to Australia and New Zealand in May (Rdio and Mog also operate in those countries) and cracked the German market in March (Deezer launched there in December).