Bloomberg News

Sony to Sell Gracenote Business to Tribune for $170 Million (1)

December 23, 2013

Sony Corp. (6758) agreed to sell its Gracenote audio-recognition software business to Tribune Co. (TRBAA:US) for $170 million, part of the consumer-electronics maker’s effort to shed units as it focuses on fewer products.

Tribune will combine Gracenote with its media-services division, which provides digital data on TV shows and movies, the Chicago-based broadcasting and publishing company said today in a statement. Sony acquired Gracenote in 2008 for about $260 million. The unit has annual sales of $100 million to $200 million, a person with knowledge of the business said last week.

Gracenote is best known for providing the software that lets Apple Inc. (AAPL:US)’s iTunes quickly identify songs when a user transfers tracks to a computer from a compact disc. The business has expanded to power many smartphone music applications that compete with Shazam Entertainment Ltd.’s song-recognition service. Gracenote also is integrating its software into televisions so marketers can learn what a person is watching and target ads based on demographics.

“Together we will become an even greater force in the global entertainment data business,” Shashi Seth, president of Tribune Digital Ventures, said in the statement.

Tribune, publisher of the Los Angeles Times, Chicago Tribune and Baltimore Sun and owner or operator of dozens of television stations, earlier this year announced plans to spin off its newspapers into a separate business. Its Tribune Media Services division collects and sells entertainment data.

Streamlining Sony

The sale will result in a gain of about $60 million to Sony’s operating income, and is projected to be completed before the end of March, the company said in a separate statement.

Sony Chief Executive Officer Kazuo Hirai is attempting to turn around the struggling Japanese consumer-electronics company by unifying its sprawling businesses, reducing costs and streamlining operations.

The company has largely missed the transition to mobile computing dominated by Apple, Samsung Electronics Co. (005930) and Google Inc. Sony posted a surprise quarterly loss in October and lowered its forecast for TVs, cameras and computers, and last month said it plans $250 million in cuts at its entertainment division that operates movie and television studios.

Audio Database

Gracenote had operated mostly autonomously since it was acquired, and its software is included in products made by many Sony competitors, including Toshiba Corp. (6502) and Microsoft Corp. The unit keeps a database of audio from songs, television shows and other content, helping gadgets like smartphones, televisions and tablets identify what is playing and, based on the genre, perform tasks such as recommending another song to play or show to watch. Amazon.com Inc. and Viacom Inc. (VIAB:US)’s MTV also use Gracenote’s technology.

Emeryville, California-based Gracenote has been trying to expand its business into the advertising market. It has introduced software that lets TV programmers and marketers recognize what a person is watching, then customize what TV ads are seen based on demographic information and viewing history. For instance, an automobile company could target ads only toward households that can afford a certain new car.

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net


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Companies Mentioned

  • TRBAA
    (Tribune Media Co)
    • $76.3 USD
    • 0.89
    • 1.17%
  • AAPL
    (Apple Inc)
    • $102.5 USD
    • 0.25
    • 0.24%
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