With media giants BMG Music, EMI, Sony, and Universal Music Group already on their customer list, Loudeye Technologies, Inc. took a logical step this morning, announcing that they would begin to focus their resources on supporting new business initiatives that directly enable the authorized delivery of digital music.
The announcement comes on the heels of other online giants rushing to deliver authorized digital content following the Napster ruling.
As part of its restructuring announcement, the Seattle-based company will consolidate its core media services infrastructure, integrate recent acquisitions and support new business initiatives under development.
“As the emerging market for digital music distribution begins to unfold, Loudeye is focused on developing sustainable, scalable revenue streams,” said John T. Baker, Loudeye chief executive officer, in a statement this morning. “I am confident that Loudeye, with the resources to move aggressively and opportunistically, is well positioned for success.”
The company plans to begin rolling out their new initiatives in the weeks ahead, which officials say will include new product offerings, key strategic alliances and acquisitions, as well as the reduction or outsourcing of non-core business operations.
Loudeye will reduce its 300-person work force by approximately 45 percent, as well as consolidate its Seattle-based operations, presently located in four separate facilities, into the company’s current corporate headquarters.
Upon its completion later in the second quarter, Loudeye expects the restructuring to produce annualized cash savings of approximately $12 million.
Despite the company’s stock floating below the 1.0 mark on the NASDAQ for much of the past two months, the CEO insists that the move was made to make best use of the company’s intellectual resources.
“Although this restructuring produces significant cost savings and strengthens our financial position, it was engineered to maximize operating efficiency and align resources with a refocused business plan that leverages Loudeye’s technology, expertise and customer knowledge,” said Baker.