Nielsen Acquires Music Metadata Service Gracenote for $560 Million

December 20 2016, 08:00
Nielsen announced it has entered into an agreement with Tribune Media Company to purchase Gracenote, the industry’s premier provider of media and entertainment metadata, including the music metadata provided to all major digital music services, including Spotify and Apple iTunes. With this transaction, Nielsen will acquire the data and technology that underpins the programming guides and personalized user experience for major video, music, audio and sports content. 

The acquisition extends Nielsen’s footprint with major clients by including Gracenote’s global content database which spans across platforms including multichannel video programming distributors (MVPDs), smart televisions, streaming music services, connected devices, media players and in-car infotainment systems. Tribune Media will retain ownership of its business-to-consumer websites, and Tribune Media expects to receive approximately $500 million in after-tax proceeds from the transaction, the majority of which will be used to repay existing debt with the remainder to be reinvested in the business. The sale is expected to close during the first quarter of 2017.

Gracenote provides reference information for over 12 million movie and television listings and 200 million music tracks, and drives the interfaces of the major streaming digital media services, as well as the connected technology systems in over 75 million automobiles. The company is the industry standard for automatic content recognition (ACR) technology, powering the discovery and recommendation engines used by world’s largest television, music and automotive companies.

By bringing Gracenote’s capabilities into its measurement framework, Nielsen will have the ability to provide clients with deeper analytics on consumer behavior and offer an unprecedented view of audience engagement from discovery to consumption. “As part of the Nielsen Total Audience measurement framework, Gracenote’s intelligent metadata will help meet our clients’ needs in an addressable world where marketers target customers and optimize campaigns in real time. The inclusion of this data will also allow media companies to optimize their content for specific audiences,” Nielsen states in the announcement.

In addition, Gracenote’s long-term client relationships across TV, audio, sports and auto will be further amplified through Nielsen’s global reach and position as the leader in audience measurement and intelligence. “Gracenote’s metadata and content recognition technology fuels the interfaces of the major video, music and in-car infotainment systems that consumers engage with every day. This acquisition provides Nielsen with a significant asset in our mission of measuring and understanding consumer behavior,” says Karthik Rao, President, Expanded Verticals at Nielsen.

“For the past decade, Gracenote has connected millions of people every day to the TV shows, sports, movies and music they love, making entertainment more accessible and discoverable,” said John Batter, Chief Executive Officer of Gracenote. “We are excited for the opportunity to take the next step with Nielsen and expand our global reach by continuing to deliver innovative, insights-based solutions to clients.”

Gracenote started as CDDB (Compact Disc Data Base), an Internet-accessible database containing information about the contents of audio compact discs and vinyl records. Several computer software applications that were capable of playing CDs, like Apple’s iTunes, used Gracenote’s CDDB technology. Sony acquired Gracenote for $260 million, in 2008, but the Japanese company failed to see the value in the business.

Tribune Media acquired Gracenote in 2014 and its unsurpassed music service was immediately added to Tribune Media Services, a provider of television and movie metadata. The combined entity was rebranded “Gracenote,” one of the largest entertainment data companies in the world. The business has grown significantly during the past three years, expanding into Europe, India, Latin America and Australia. Gracenote also acquired a digital sports data business in 2015 and launched Gracenote Sports. Music services such as Apple and Spotify use Gracenote data to power recommendation engines. Gracenote is on the open road as well, with data and technologies powering the infotainment systems in 85 million cars from Tesla, Ford, BMW, Toyota and others.

“Over the last three years, under Tribune’s ownership, we’ve transformed Gracenote into a global data powerhouse and Nielsen’s acquisition ushers in an exciting new chapter for our people, products and customers,” said John Batter, Gracenote's Chief Executive Officer. “Nielsen is a natural home for Gracenote. Both companies have entertainment data at their core and have spent years delivering services to the world’s top media brands. Bringing together our data for driving discovery and tune-in with Nielsen’s deep insights about what people are watching, listening to and buying makes a formidable combination.”

Gracenote will be incorporated into Nielsen's Watch segment and operate as a business unit within Nielsen. The company will continue to operate from its headquarters in Emeryville, Calif. |
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