ChainCast Grabs StreamAudio

They helped StreamAudio become successful and now they own them.

That’s the story at San Jose, Calif.-based ChainCast Networks, which says it purchased the Seattle-based company on Tuesday. The financial terms of the acquisition were not disclosed.

The two companies are hardly strangers. A few month’s ago, StreamAudio, which specializes in Internet radio streaming and ad replacement technology, successfully tested ChainCast’s technology with its network of radio stations.

At the time, replacing advertising over Internet-based radio broadcasts made front page news because of a power struggle over royalty rights between Clear Channel Communications and the American Federation of Television and Recording Artists.

That experience led to a couple of joint live streaming agreements between the two companies. Then, ChainCast began talking about its long-term strategy and the rest, they say, is history.

“We will prove that Internet Radio can sustain a profitable business model if, and only if, Webcasters can dramatically reduce their cost of streaming,” says ChainCast president and CEO Paul Distefano. “Our technology and content delivery platform made this work for StreamAudio, and we can make it work for any media company or any one of our other potential customers.”

The deal is also a boon to ChainCast which now has the opportunity to tap into StreamAudio’s streaming radio clients including Cox Radio, Entercom, Salem, Zimmer, Empire, Morris, MyStar and Regent for a total of 280 radio stations.

As part of the StreamAudio will continue to deliver its streaming and ad insertion offerings to radio stations and media companies worldwide under the StreamAudio.com brand using the ChainCast platform.

ChainCast’s technology is a broad networking platform that uses what it calls Virtual Multicast Routing (VMR). The platform architecture, allows customers to stream content at a dramatically lower cost compared to other solutions by creating streaming media overlay networks on demand.

These networks transform each client from a media player for local playback to a VMR player that is a combination of the media player and a soft router for the originating stream.

The company says since the receiving VMR player can route (or cascade) an original stream to several other VMR players in the overlay network, the technology produces a multiplier effect that increases the number of listeners that can be served off of each originating stream.

Even though the two companies have worked together and need each other’s expertise, it is not known how much of StreamAudio’s workforce will be absorbed into the ChainCast payroll.