RealNetworks Inc, operator of U.S. subscription-based online-music service Rhapsody, has acquired Austria-based mobile-music platform developer Sony NetServices (SNS) for approximately $9 million in cash.
SNS, a business-to-business venture that hosts mobile music, ringback tones and other entertainment content for wireless carriers, is a joint venture of Sony Corp.’s Sony Europe and Sony DADC, which prepares content, including music, for digital distribution.
The SNS acquisition will extend RealNetworks’ global reach in the mobile-entertainment sector by complementing the services of WiderThan, a similar venture that RealNetworks bought from South Korea’s SK Telecom for $350 million in 2006.
WiderThan hosts the music and entertainment platforms for U.S.-based Verizon Wireless, which is partly owned by Vodafone; U.S.-based Helio, the SK Telecom and Earthlink mobile-network joint venture; and Canada’s Rogers Wireless.
Combined, SNS and WiderThan give RealNetworks 12 mobile music-on-demand clients in 11 countries with 196 million subscribers.
“After establishing our credentials in Asia and the U.S. with WiderThan, we’ve been looking for the right opportunity to establish the same relationships with carriers in Europe,” John Giamatteo, RealNetworks’ president of technology products, solutions and international operations, tells Billboard.biz.
“Operators are seeking companies like ours that have the core competency for digital technologies and other challenges to get music and entertainment to consumers. Now we want to build on that foundation.”
SNS will now be known as RealNetworks Austria, and come under RealNetworks Europe. The StreamMan brand name will also be changed during the next month.
The restructured RealNetworks Inc., however, expects to retain the WiderThan name at some level within the company, especially because of its strong brand heritage in Asia, where it originated.
And although the Sony NetServices name will go, RealNetworks has reached an agreement with SNS co-founder Sony DADC, which will prepare all content for mobile distribution.
RealNetworks’ latest move in Europe is expected to help boost its digital-music revenues, which generated $34.1 million in the first quarter of 2007, an 18% jump compared with the same period the year before. Total revenues rose 50% to $129.5 million in the first quarter from the same period in 2006.