Optus signs new music supplier as Soundbuzz folds

Australian telco Optus is expected to announce that digital content services agency MIA International has secured a multi-million dollar music services contract with the carrier, following the sudden demise of Motorola’s Soundbuzz group.

Optus has confirmed that it had closed the tender for the music services contract which includes, ringtones, full track and album downloads and music video content, but could not reveal the tender winner yet. Sources close to the deal have confirmed that MIA has snared the ongoing contract which will be announced within a week.

Asia’s largest online and mobile music services provider Soundbuzz is winding down its operations and will shut down its offices in Australia, India, Indonesia, Vietnam and Singapore on July 31.

Motorola acquired the successful regional music content operator 18 months ago in a bid to compete with aggressive content plays by Apple, Nokia and Sony Ericsson and to expand its MotoMusic service through India, Southeast Asia, Australia and New Zealand.

Following a review, the struggling vendor decided that it would take a different direction with its music content strategy and shed the Soundbuzz operations and ditch MotoMusic.

Around 65 staff across the region will be affected. Motorola spokesperson Lynn Chan said that discussions were currently underway with potential buyers for some or all of the Soundbuzz assets.

At this stage it is unclear if any of the outstanding carrier contracts would be part of the sale. Soundbuzz’s carrier customers in the region include Hutchison 3, Airtel, M1 and VSNL. Optus is the first to announce that it has shifted providers as a consequence of the closure.

Chan said that Motorola’s mobile devices division would be streamlining its portfolio and will be introducing Android-based smartphones. “This means Motomusic and Soundbuzz are no longer core to our market strategy.”

The vendor added it was “committed to doing what is necessary to address the evolving economic conditions we face and to taking the required steps to enable our recovery.”

Motomusic will still be available to consumers until 31 July 2009 in India, Singapore and Vietnam.

Soundbuzz was a pioneer in digital music, founded in 2000 by former MTV Asia MD, Sudhanshu Sarronwal, largely as an antidote to the piracy unrest caused by Napster.

It worked closely with record labels and new technologies to navigate the unchartered waters of DRM and online and mobile content distribution.

“Soundbuzz’s goal has always been to keep the value in music and to make it easier for fans, artists and businesses to consume music via the internet or mobile phones,” said Australian general manager Paul Buchanan. “Soundbuzz has been very instrumental in bringing many new technologies to the music industry and together working out ways to promote artists and make new revenue streams.”

 

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