Music Web site acquires anti-piracy software company.AFTER spending more than $200 million on a failed record label, among other endeavors, ArtistDireet Inc. will try its hand at another line of business: anti-piracy software. L.A.-based ArtistDirect, founded by former Interscope Records mogul Mogul: see Mughal. Frederick "Ted" Field, has acquired Marina del Rey-based MediaDefender Inc. for $42.5 million. MediaDefender develops software that can detect and prevent illegal file swapping See peer-to-peer network and file sharing protocol. of copyrighted music on a peer-to-peer network (1) A network of computers configured to allow certain files and folders to be shared with everyone or with selected users. Peer-to-peer networks are quite common in small offices that do not use a dedicated file server. like Kazaa. It can also identify the offending of·fend v. of·fend·ed, of·fend·ing, of·fends v.tr. 1. To cause displeasure, anger, resentment, or wounded feelings in. 2. user, a quality that media companies would find attractive. MediaDefender operates through service contracts with record labels to protect music on a title-by-title basis. Jon Diamond, chief executive of ArtistDirect, said he hopes that the acquisition will provide "a compelling opportunity for marketing and promotion, because it's a solution to the leading issue that the entertainment media industry is facing right now." Originally an online music network for signed and unsigned unsigned Adjective (of a letter etc.) anonymous Adj. 1. unsigned - lacking a signature; "the message was typewritten and unsigned" signed - having a handwritten signature; "a signed letter" artists, ArtistDirect spent millions of dollars trying to establish a joint-venture record label, ArtistDirect Records, with Field in the unusual role of chief executive and joint-venture partner. In a restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , ArtistDirect Records was deconsolidated and removed from the company's balance sheet. The company pared down to the Internet business, which offers streaming music, video clips A short video presentation. , ring tones, original content and music from signed and unsigned artists. ArtistDirect is the fourth-largest music destination site on the Web, with more than 500,000 artists. Diamond said the company plans to extend MediaDefender's anti-piracy offerings into video, software and games, hoping to attract more labels and media companies as customers. ArtistDirect lost $3.3 million last year, after losing $21.7 million in 2003. In the first quarter, the company recorded $20.4 million in net income, thanks to a non-cash gain of $21 million on the sale of its interest in ArtistDirect Records. ArtistDirect shares, traded over the counter, have been trading in the $3 range since March. Staff Reporter Hilary Potkewitz can be reached by e-mail at hpotkewitz@labusinessjournal.com or by phone at 323-549-5225 ext. 226. |
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