Report: eMusic Mulls Sale; Best Buy, Rhapsody Among Suitors

Authored by Mark Hefflinger on January 4, 2010 - 8:41am.

New York - The investment firm that owns digital music service eMusic is exploring a possible sale of the company, and has spoken with potential suitors including Best Buy and RealNetworks' Rhapsody, The New York Post reported.

The company is owned by Dimensional Associates, a unit of investment firm JDS Capital Management.

"We're opportunistic stewards of capital," eMusic CEO Daniel Stein told the Post. "If an offer was made that created value for our shareholders, we'd listen to it."

In addition to a sale, the company is reportedly considering recapitalization, as well as adding a streaming component to its core subscription-based download service offering.

A rash of acquisitions has recently hit the streaming music service market, as News Corp.'s MySpace acquired iLike and imeem, and Apple purchased Lala.

The Post cited sources who said that eMusic is generating $65-$70 million in annual revenues from some 400,000 subscribers, and is not in dire financial straits.

The company had long catered mainly to fans of independent music and genres like classical and jazz, but recently signed a deal to include major label Sony Music's catalog.

The Post reports that eMusic is close to signing similar back catalog deals with two of the remaining three major labels.

Related Links:
http://snipurl.com/tyrek (New York Post)

http://www.emusic.com