Canadian media company Stingray Digital Group Inc. is buying Benelux-based music provider DJ-Matic NV/BV, establishing a beachhead for an aggressive push into Europe to sell its commercial music services.
The roughly $20-million deal provides a jumping off point for Stingray’s commercial business in Europe, where executives say it plans to expand further in the years ahead. The business sells curated background music, video and signage to customers such as Telus Corp. and Sports Experts.
Adding DJ-Matic gives Stingray contracts covering some 10,000 bars, retail stores, hotels and other locations where DJ-Matic supplies music and multimedia. Its clients, such as Midi Station restaurant in Brussels, are located in Belgium, the Netherlands, Germany and Denmark.
These are not easy times for the retail industry in many corners of the world but companies that are maintaining their bricks-and-mortar stores are doubling down on their investments, said Stingray founder and chief executive Eric Boyko. That includes the audio and visual experience for customers.
“Everybody wants to be the next Apple store,” Mr. Boyko said. “They want to have the best stores, the best experience.”
Stingray, best known in Canada for its commercial-free streaming service Stingray Music, has been an active industry consolidator since it went public in 2015. It now derives more than half its revenue from international sales but continues to purchase strategic assets at home as well. Those include the acquisition earlier this year of Newfoundland Capital Corp. Ltd, Canada's second biggest private radio broadcaster, for $506-million including debt.
Commercial music is a growing business for Stingray, contributing about $35-million in revenue in fiscal 2018. That was up about 31 per cent as the company signed up more customers and expanded its capability with the purchase of Satellite Music Australia Pty Ltd. and SBA Music Pty Ltd. in 2017.
Canada has a market of roughly 150,000 retail locations for commercial music providers, Mr. Boyko said, of which Stingray has captured about half. By contrast, Europe has about two million in a very fragmented market. Major competitors in the space include Mood Media Corp., based in Austin, Tex., and Britain’s Imagesound Ltd.
"It's a big opportunity for us," the CEO said. "We wanted to start with a company that was a good size so we can eventually dominate Europe."
Stingray will use a line of credit to fund the acquisition. DJ-Matic’s management will stay on and run the business.