WOODLAND, Calif. -- Video and music distributor Valley Media here this month reached an agreement in principle to form a new company to take greater advantage of digital distribution opportunities.
Woodland. The existing shareholder group of amplified.com and Valley would each own 50% of the outstanding shares of the new company. Valley would provide continuous service to its Internet customers and serve as the fulfillment partner for amplified.com.
"With this combination, Valley will fundamentally reposition its internet strategy," said Rob Cain, Valley's chief executive officer. "Amplified.com will essentially be our e-commerce arm. It is a unique combination: amplified.com's leadership in digital distribution with Valley's leadership in Internet fulfillment and data. It embodies our strategy to bring significant new resources to our Internet businesses," he said.
Valley is forming the new company to bring additional resources to its Internet businesses, provide business-to-business solutions for e-commerce and to maximize synergies with amplified.com, the company said in a statement. Among the products and services to be offered by the new company would be digital distribution, direct-to-consumer fulfillment, data to support e-commerce and consumer interest, digital rights management, custom compilations and just-in-time manufacturing. Projects slated for 2000 include an on-line music-sampling service and a turnkey private-label store that would make it easier for retailers to sell digital or packaged music and video on the Internet.
"We have always worked with our vendors to place more of their product effectively and efficiently into the digital and physical marketplaces without channel conflict. In support of these goals, amplified.com will offer us a way to leverage their five years of experience in cyberspace as well as a vehicle to attract significant capital to develop better services. We are excited about the capabilities that amplified will bring to us," said Cain.