Sony Buys Sonic Foundry (ACID and Vegas and Sound Forge ...)

[BJ_M]

CULVER CITY, Calif. & MADISON, Wis.--(BUSINESS WIRE)--May 2, 2003--Sony Pictures Digital and Sonic Foundry(R), Inc. (NASDAQ:SOFO) announced today Sony Pictures Digital has struck an agreement to purchase all of Sonic Foundry's desktop software products and related assets for $18 million cash and assumption of certain trade payables, accrued liabilities and capital leases associated with the desktop software business.
The acquisition of Sonic Foundry's desktop software follows the recent retail release of Sony Pictures Digital's Screenblast(R) Movie Studio(TM) and Screenblast(R) Music Studio(TM) video and music-mixing applications created in conjunction with Sonic Foundry's award-winning software team.
Sale of the desktop software assets includes Sonic Foundry's popular, industry-leading ACID(R), Sound Forge(R) and Vegas(R) series of software products, as well as other related assets. Sony anticipates maintaining the group's Madison, Wis. base. The Board of Directors of Sonic Foundry has approved the transaction and certain shareholders have agreed to vote their shares in favor of the sale. Approval of the agreement may be subject to Sonic Foundry shareholder approval and other various conditions (see details below).
"During the past three years, we have come to recognize and admire Sonic Foundry's engineering expertise and value their software applications. We are excited to integrate this world-class team and their products into our ongoing efforts to produce and deliver
the next generation of consumer entertainment services," said Patrick Kennedy, executive vice president of Sony Pictures Digital.
"The sale of our music and video digital software products is a key milestone in Sonic Foundry's history," said Rimas Buinevicius, chairman and CEO of Sonic Foundry. "We couldn't pick a better partner than Sony Pictures Digital to carry on the same passion and success we've achieved over the past 12 years," he said. "Consummation of this agreement will give us the cash we need to pay our debt and allow us to focus our attention on writing the next successful chapter of Sonic Foundry's story - rich media - and building upon the early success we've already achieved with our Web presentation solution, Media Site Live(TM)."
Sony Pictures Digital oversees the digital production and online assets of Sony Pictures Entertainment and leads its efforts to develop and provide new forms of online content, games, interactive programming, open-access video-on-demand and wireless entertainment. Screenblast, which first debuted in September 2001, gives the consumer the ability to create, enhance and share their digital videos, music and photos with a combination of a powerful software suite and an easy-to-use online service for sharing and personalizing consumers' media. Screenblast Movie Studio and Screenblast Music Studio software have been available through retail outlets since October 2002.
Sonic Foundry will file a proxy statement shortly with the SEC and mail to investors of record as of April 25 detailing the proposed transaction up for possible approval at its June meeting in Madison, Wis. The company expects to close the transaction within a few days following the shareholder meeting.
The signed agreement marks a major milestone in Sonic Foundry's longer-term strategy to concentrate on markets where rich media solutions are being embraced. The company will use the proceeds to pay off debt and fund its operations for its Web-based rich media communications product, MediaSite Live and related offerings.

About Sony Pictures Digital

Sony Pictures Digital oversees the digital production and online assets of Sony Pictures Entertainment (SPE) and consists of four key operating business units: Sony Pictures Animation, Sony Pictures Imageworks, Sony Online Entertainment and Sony Pictures Digital Networks which includes SoapCity, Screenblast, Sony Pictures mobile and wireless services, the studio's online promotional arm SPiN, and the UK interactive television service GoPlayTV. By making information and entertainment available anywhere, anytime on any connected device, Sony Pictures Digital is exploring new technology that links hardware with software in ways that advance the current boundaries of the entertainment landscape. For more information, please visit www.sonypictures.com.

About Sonic Foundry, Inc.

Founded in 1991, Sonic Foundry (NASDAQ:SOFO) is a leading provider of desktop and enterprise digital media software solutions. Its complete offering of media tools, systems and services provides a single source for creating, managing, analyzing and enhancing media for government, business, education and entertainment.
Sonic Foundry is based in Madison, Wis., with offices in Santa Monica, Toronto and Pittsburgh. For more information about Sonic Foundry, visit the Company's Web site at www.sonicfoundry.com

[tumbar]

Sony got quite a bargain!

[tygrus2000]

This all we need. Big music conglomerates owning all the creative software as well as the public music content. Your freedom and choice is rolled back a little everytime something like this happens. Same thing happened with OS and now Bill Gates controls all that now.

tygrus

[Arky]

This all we need. Big music conglomerates owning all the creative software as well as the public music content. Your freedom and choice is rolled back a little everytime something like this happens. Same thing happened with OS and now Bill Gates controls all that now.

tygrus

Hmmm... My gut instinct is to agree with you, at least in principle, tygrus2000, but I must say that I was wondering how SF were going to be able to find the (financial, not technical) muscle to compete in the NLE market with the likes of Pinnacle, although the audio side of their business appears to be rock-solid in terms of competitiveness. In terms of SF's financial security, this was probably a good move. However, I do share your cynicism about corporate ownership of previously independent companies. It is worrying, and I still get shivers when I think of how Steve Jobs snapped up Spruce Technologies a few years ago, ripping it from the grasp of it's committed customers on the Windows Platform.

We shall have to wait and see. I am certainly suspicious of Sony's motives, since I don't suppose they really give a damn about improving the products themselves - it seems to me that SF were an opportunity-going-begging (i.e. a chance to make a fast buck), rather than an asset Sony would probably wish to grow. I rather like SF's approach to software engineering, and it would be a great shame to see it fall by the wayside, or get 'dumbed-down' by corporate unoriginality.


Arky ;o)

[txpharoah]

I have a low opinion of Sony and its executives. In my eyes, we just lost a great product (Sonic Foundry Sound Forge - the Photoshop of sound). I'm curious how they'll screw this one up (and when).

FYI: I was never a fan of Acid or Vegas anyway, they were not market leaders anyway. But I can feel for those users. Sony has a way of lousing up most of what they make. I ask people all the time, what did Sony do for us? They usually cannot get past Playstation, their one and only answer.

And for any of those people out their that like to guess at where I work, add Sony the list of incorrect answers (along with Disney and Microsoft).

[BJ_M]

I have a low opinion of Sony and its executives. In my eyes, we just lost a great product (Sonic Foundry Sound Forge - the Photoshop of sound). I'm curious how they'll screw this one up (and when).

FYI: I was never a fan of Acid or Vegas anyway, they were not market leaders anyway. But I can feel for those users. Sony has a way of lousing up most of what they make. I ask people all the time, what did Sony do for us? They usually cannot get past Playstation, their one and only answer.

And for any of those people out their that like to guess at where I work, add Sony the list of incorrect answers (along with Disney and Microsoft).

since vegas 4 was released - it has been the best selling NLE avaible in the pro market ..

A lot of users of ACID i think would call it a market leader .. not sure how its position is though -- it doesnt have a whole lot of compitition..

[mats.hogberg]

Couldn't be worse! After all, Sony is the company that created the paradox where they are:

• A) Selling MP3 player hardware.
  B) "Protecting" their CD's so they can't be ripped to MP3.

What's next on their agenda? Maybe a proprietary sound compression format, that will be the only input/output option in Sonic Foundry?
Thank God for GPL'ed software!

/Mats

[DVWannaB]

Not sure if this is good or bad. The recent news was that Sonic Foundry was in financial woes and were actively seeking "help". SO this is not a surprise. But Sony!!!!! It is going to be interesting to see new versions/releases of Sonic Foundry products over the months to a year. I am cautiously pessimistic about future releases as Sony turns the screws.

I have Vegas Video 3 and was considering Vegas 4. Now I think I am going to wait on that to see what direction SF and Vegas are headed.

[MJPollard]

I have Vegas Video 3 and was considering Vegas 4. Now I think I am going to wait on that to see what direction SF and Vegas are headed.

Sony's purchase of SoFo doesn't exactly give me a warm, squishy feeling, either, but I'm gonna wait and see what happens. "Vegas 4 been veddy, veddy good to me," to paraphrase SNL's Garrett Morris, and it's not like it's going to stop working just because Sony's the new head honcho. (I'm more concerned about DVD Architect's future; it's a very good product, but it still needs some of its rough edges trimmed.)

[DVWannaB]

I have Vegas Video 3 and was considering Vegas 4. Now I think I am going to wait on that to see what direction SF and Vegas are headed.

Sony's purchase of SoFo doesn't exactly give me a warm, squishy feeling, either, but I'm gonna wait and see what happens. "Vegas 4 been veddy, veddy good to me," to paraphrase SNL's Garrett Morris, and it's not like it's going to stop working just because Sony's the new head honcho. (I'm more concerned about DVD Architect's future; it's a very good product, but it still needs some of its rough edges trimmed.)

I hear you MJ. My concern was more along the lines of the corporate limitations that are inherent at Sony (big brother) that will be leveraged on SF and their current product lineup and their future releases. I dont want to upgrade to a product that will be vastly different as far as progession/advancement is concerned. Will Sony encourage and properly fund such developments to stay ahead of competitors or just get in the way progress.

[Arky]

Some more discussion on this topic can be found here:

http://www.dmnforums.com/cgi-bin/tdisp.cgi?forum=sonic-foundry_vegas&post=030402164439.htm


Arky ;o)

[lgh529]

I know that this is an old thread, but I had a little update that may make some of you rest a little easier, at least in the near future.

I was just at a trade show in Orlando, Florida this week and Sonic Foundry was there. I made a point of talking to the booth guy about the Sony purchase. He said that Sonic Foundry sold two of their three divisions. The other one I had never heard of. Anyway, this guy said that Sony was leaving the Vegas Video/Sound Forge acquisition alone as far as structure. No layoffs or relocations.

Sonic Foundry is now concentrating on their remaining division which is a web based teleconferencing system (it looks pretty cool actually). So the company still exists and will continue to operate.

Hopefully Sony's influence will not get into the products for a while.

[mysticgohan17]

<<<<<will never update to any sound forge released once this is effective

[rsuave5]

well i love sony and there products. i have sony tvs, digital cam,video cam, sony (kick ass) vaio computer and would of named my first child sony if not for my wife. i used to stick up for txpharao but im beginning to see the light and agree with most people that he is ignorant and opinionated and when proven wrong will say "well im no tech" dont answer then! also this illusion of a job thats so secretive oooooooh. grow up every post on here has some stupid response from you! have you no life? go play on your many computers and if your works so secretive concentrate on it instead of spreading bull on this site. your amd vs p4 was so opinionated and full of utter crap you made me want to buy and amd to spite you and i love pentium. in short your dumb and probably old.


anyway i love sony hardware so please lets seperate there hrdwre from sftwre issues. as a huge conglomerate they have an interest in anti piracy and they are very rigorous in that pursuit and as an avid pirate i hate that, but i understand it. to say they will ruin sonic is just an ignorant statement as we have no way of knowing. my sony vaio came with 3 sonic titles and alot of vaios come with sonic programs and they seem to have had a prettygood relationship before and i heard sonic had recent money troubles and hopefully sony will rescue them and keep the core staff and parameters of the sonic programs. if they screw up ill be the first to say screw um but as huge as they are they have great products!

as far as being the photoshop of audio that was pretty dumb also! i have a friend that is an audio engineer and he says it is an advanced home user program but they never use it in the industry as it is basic!

i love sonic foundry
dvdit
reel dvd
please improve these programs sony!

[rsuave5]

txpharo says

FYI: I was never a fan of Acid or Vegas anyway, they were not market leaders anyway.

they were very much market leaders dumby! at least near top of there markets

txpharo says

Sony has a way of lousing up most of what they make. I ask people all the time, what did Sony do for us? They usually cannot get past Playstation, their one and only answer.

industry leader in mini cams, vcrs,close on dvd players, consistent top maker of tvs and professional video and audio equipment . i dare you to find a pro. studio in the nation with no sony products!

[dcsos]

rsuave you are making a big mistake..
YOU ARE CONFUSING 2 DIFFERNT COMPANIES

WE are discussing SONIC FOUNDRY
not SONIC SOLUTIONS

Please look at what you wrote:

my sony vaio came with 3 sonic titles and alot of vaios come with sonic programs and they seem to have had a prettygood relationship before

THOSE are SONIC SOLUTIONS PROGRAMS that you list at the end of your post not SONIC FOUNDRY that we are iscussion has been bought by SONY

SONIC SOLUTIONS on the other hand has been recently liscenced (not bought) by a COMPETITOR to SONIC FOUNDRY---AVID/DIGIDESIGN
and additionaly, SONIC SOLUTIONS themselves bought VERBATIM cd burning software ...

ALTHOUGH I AGREE WITH YOU THAT THEY (SonicF) HAVE BECOME A MAJOR MARKET LEADER(in contrast to others old views that premiere can still cut it).............and the SONY COMPANY itself has a gret deal of INTEGRITY for a PRIVACY GRABBING BEHEMOUTH!