RioPort, ECast Announce Merger

Digital music delivery ASP RioPort is
putting its technology on “out of home” devices as part of a merger deal
with Ecast.

Financial terms of the transaction were not released but Ecast said the deal
came with a $14 million venture capital investment round co-led by Oak
Investment Partners and Doll Capital Management.

Ecast CEO Robbie Vann-Adibe retains the post in the combined firm and
RioPort’s boss Jim Long becomes general manager of the company’s RioPort
business.

Ecast, which also operates in the digital delivery space, is known for its
digital juke-boxes in bars and lounges nationwide. By merging with RioPort,
Ecast plans to push new services for cross-promotion and merchandising of
digital media content to consumers.

For instance, consumers would be able to listen to a song on an
Ecast-powered jukebox in a bar, then log on to a Web-based e-commerce
provider directly from the jukebox screen to buy the song and download
directly to a RioPort-enabled MP3 player.

About 1,000 Ecast-powered jukeboxes are already installed and operational in
big cities around the U.S and the company is keen to use RioPort’s platform
to help its long-term plans to deliver digital entertainment content to
portable devices and in-home consumers.

RioPort also builds and markets technology for consumer electronics firms
like Sanyo, Compaq and Samsung.

Analysts applauded the merger Wednesday, noting that Ecast gets
valuable licenses for paid downloads in the deal. “Rioport brings some good
technologies and the valuable licenses that everyone is dying for,” Jupiter
Research analyst Lee Black said.

“I like this deal. It helps to bring these kiosk-type devices into the home
and adds another point of presence for RioPort’s delivery mechanism,” Black
added. “Both Ecast and RioPort can gain a lot from this merger. They’re
probably better together than they are apart in this economy.”

“Another good sign is the venture capital that’s coming with this deal. It
shows there’s some venture money flowing into a music-oriented business.
It’s not a ton of dough but it’s clear VCs have run the numbers and have
seen potential (in digital music delivery),” he said.

Ecast plans to spend the money to extend its broadband network, accelerate
the deployment of Ecast products and expand the company’s market. Other
investors participating in the round include St. Paul Venture Capital and El
Dorado Ventures, both Silicon Valley-based venture organizations.

“This merger creates a broader platform for the delivery of digital content
and positions Ecast as a stronger service partner for all our customers —
content owners, operators, e-tailers, and consumer electronics
manufacturers,” said Vann-Adibe, CEO of Ecast.

The new Ecast RioPort division will maintain offices in the U.S. and Asia
and focus on the aggregation, delivery and management of secure digital
content to all types of digital devices, the company said.