Bertelsmann Acquires myPlay

The consolidation in the music space continued on Wednesday as Bertelsmann Music Group (BMG) announced it was acquiring music locker company MyPlay (www.myplay.com) for an unspecified sum. This comes on the heels of Vivendi Universal acquiring rival company MP3.com for about $372 million last week. MP3.com had a similar music locker service, which led the music industry to sue the company.

According to Doug Camplejohn, CEO of MyPlay, the company will be completely absorbed into BMG (www.bmg.com), specifically into the e-commerce division called BeMusic. Currently BeMusic includes online retailer CDNow and BMG Direct, which operates a leading music club.

BMG gains the technology behind music lockers, which allow users to save MP3s onto a secure site for anytime streaming access. The vision, says Camplejohn, remains the same: to allow users to have one central place to store their music. Camplejohn said that MyPlay has already been in contact with various Bertelsmann groups and expects to roll out a service in the next few months.

Camplejohn pointed out that BMG's direct marketing division is already a powerhouse. "Combining [CDNow's] retail reach, it gives Bertelsmann reach beyond any regular retailer," he said.

As the music labels align themselves — AOL TimeWarner and EMI behind RealNetworks' backed MusicNet while Universal and Sony are backing Yahoo! with the upcoming Duet service — the music fans are the ones most likely affected. If the two competing services decide not to cross license music, fans will only have access to artists backed by a limited number of labels.

Camplejohn, however, says that BMG is aware of this. "[BMG] says consumers don't care what label Dave Matthews Band is on. They just want constant access and a full catalog," he said. Camplejohn said that all the labels are in discussions to work together.

MyPlay has been the subject of acquisition talk. Last year, it was rumored that Yahoo! was in talks to buy the company. Camplejohn admitted that yes, Yahoo! did approach them and that it went through the acquisition process, but talks fell apart after conflicts with AOL and Yahoo!.

Redwood City, CA-based MyPlay currently has 35 employees and over 5 million music locker customers.