On July 2, 2012, when Avid announced that it was selling multiple audio and video product lines, it was easy to miss the big picture. More layoffs from Avid accompanied the news, and many people focused on the downside as Pro Tools users worried about the future of their long-known DAW and I / O hardware vendor.
But every story has two sides, and the positive angle was that M-Audio’s respected product line , along with the less visible AIR Software Group, had a welcoming new home: Rhode Island-based inMusic, an experienced company. in space through its ownership of Akai Professional, Alesis and Numark, as well as other DJ, performance and music production brands.
It has been an interesting journey for M-Audio, the company that was founded in the late 1990s by a California Institute of Technology graduate named Tim Ryan. Originally nicknamed Midi Soft and later Midiman, Ryan and his colleagues quickly grew their baby into a competitive manufacturer of MIDI keyboards and audio interfaces. Avid, suitably impressed, bought Midiman (which had been doing business under the M-Audio name since 2000) for a whopping $ 174 million in 2004.
But even with a host of successful DJ and recording products (KeyStudio, Fast Track, Torq) and high-profile users (Black Eyed Peas, Skillrex, The Crystal Method), at some point M-Audio no longer fit the bill. Avid plans. M-Audio changed hands earlier this month, with a new headquarters right at the end of Avid’s base of operations in Burlington, Massachusetts.
What drives mergers and acquisitions (M&A) in the audio industry?
In an industry where users have had to deal with what seems like a continual degradation of the value of their music, it’s interesting – and not the least bit worthwhile – to know that audio tool builders are still viewed as valuable.
We interviewed inMusic Marketing Director David Frederick about the market forces that led to the new acquisition of his company.
David Frederick, Marketing Director at inMusic
How would you characterize the inMusic brand group – what is the common thread of the products you supply to the market?
I would characterize them as diverse and synergistic. All of our brands combine leading technology, innovation, functionality and creative inspiration in all market and price segments. Combining that with our drive and passion to deliver world-class products, we firmly believe that Music is uniquely positioned to offer the most innovative and creative tools available to musicians, songwriters, producers and DJs around the world.
The common thread that we supply to the market is a family of premium brands that reach a wide market segment. In many cases, our products leverage common intellectual property that helps democratize creativity and functionality across all of our product lines and brands. The greatest common thread is our passion and focus on delivering products that meet and exceed the needs of our customers. This thread drives everything we do at inMusic.
When was inMusic interested in acquiring M-Audio and why? How did you see it complementing the brands you already had like Akai, Alesis and Numark?
inMusic is always looking for unique and complementary opportunities to help us deliver world-class products.
Our interests and those of Avid are aligned when it comes to our acquisition. We were interested in M-Audio and the AIR Software Group because they not only offered unique and market-leading products, but they were consistent with our growth model and product strategy. In addition, both M-Audio and the AIR Software Group have unique and extremely valuable technologies and intellectual properties, which inMusic will be able to leverage for the benefit of its other brands and customers.
In the professional / consumer audio space, what are the top considerations a company thinks of when deciding on an acquisition? What are the benefits and, conversely, what are the responsibilities you must weigh?
Of course, this question is different for different companies. For inMusic we look at a variety of tactical, strategic and growth considerations. For us, it’s about delivering world-class innovative products for our customers.
Things like IP, technology enablement, synergistic or complementary offerings, IP cross-use, market share and position, human capital, growth opportunity, and sustainable competitive advantage are all at play. in the calculations of an acquisition such as that of M-Audio and AIR Software Group.
In all acquisitions there are assets and liabilities. These must always be weighed against overall tactical and strategic objectives. It is also clear that the liabilities of one company are the assets of another.
In this regard, mergers and acquisitions at this level are relatively rare in the professional and consumer audio space. Why would a product line like M-Audio no longer be essential to one company – Avid – but still worth investing in another, inMusic?
I cannot speak to Avid’s thinking outside of what they have discussed in their press release and announcement call. As for inMusic, what we do is invest in quality, innovative and dynamic brands. Once again, it’s about innovating, delivering and offering the best products in the world.
¿Cuántos empleados de M-Audio permanecerán en inMusic? ¿Cómo decidirán quiénes se quedan?
Como empresa privada no revelamos nuestra información financiera ni los términos de nuestras adquisiciones. Sin embargo, dicho esto, estamos reteniendo personal clave de M-Audio y AIR Software Group que ayudará a apoyar, desarrollar y seguir innovando y ampliando las ofertas tanto en M-Audio y AIR Software Group como en nuestras marcas existentes.
¿Cuál es su opinión sobre las perspectivas a largo plazo del sector de audio profesional y de consumo que ocupan M-Audio y las otras marcas de inMusic?
Mi opinión es que el sector del audio profesional y de consumo siempre es bastante volátil y evolutivo. Las empresas que pueden adaptarse y aprovechar las arenas movedizas parecen hacerlo bien. Las que no pueden, bueno, parecen ir a la deriva.
Es un sector de mercado difícil. Tienes muchos factores que influyen en su comportamiento. En un sentido, la democratización y habilitación de la tecnología creativa ha permitido a una nueva generación de clientes participar en el proceso creativo. En otro, el mercado parece estar bifurcándose en segmentos discretos de pro y consumidores, con el segmento de “prosumidores” disolviéndose o, como mínimo, teniendo sus líneas borrosas entre el segmento de mercado de la tríada tradicional: consumidor, prosumidor, pro. Esto crea una oportunidad para algunos y un desastre para otros.
Para nosotros, estamos enfocados en entregar productos de clase mundial para todos nuestros clientes en todos los segmentos del mercado. Ese enfoque nos permite ser receptivos frente a reactivos en nuestro enfoque de cómo servimos al mercado. Este modelo nos ha servido claramente bien.
Estamos realmente entusiasmados con las perspectivas a largo plazo de nuestra industria. inMusic está creciendo a pasos agigantados. Estamos liderando y participando en nuestros respectivos segmentos de mercado. Estamos desarrollando productos innovadores y excitantes, y acabamos de adquirir una marca fantástica, una línea de productos y una tecnología asombrosa.
For us, both our short-term and long-term futures are bright. For our customers, distributors and partners, our family of brands offers quality, innovation, value and products in high demand.