The proposed AlphaTheta Serato merger will no longer go ahead, meaning the two companies – and your DJ software – will remain separate. Is this a good thing?
AlphaTheta Serato Merger Deal Blocked
One of the biggest DJ news stories of last year was the proposed AlphaTheta Serato merger. AlphaTheta Corporation, the company behind Pioneer DJ and others, attempted to acquire Serato Audio Research. This was not a so-called ‘hostile takeover’ but a mutual one and would have put the two top DJ apps, Pioneer DJ rekordbox and Serato, under one roof, giving AlphaTheta 90% of the DJ software market.
Because Serato is based in New Zealand, this merger had to be approved by the New Zealand Commerce Commission (NZCC). After almost a year of deliberation, the NZCC released its findings this week. The board said no to the AlphaTheta Serato merger.
Busting Makes Me Feel Good
The reason for the block was, essentially, to prevent AlphaTheta from acquiring a monopoly in the DJ market.
“The evidence gathered by the Commission,” said NZCC Chairman Dr John Small in an announcement, “indicated that Serato and rekordbox compete closely in the DJ software market. While other DJ software providers would remain in the market, we did not consider these rivals, or the possibility of a new DJ software provider entering the market in the near term, would be sufficient to replace the level of competition that would be lost with the merger. We therefore could not exclude a real chance that the merger would result in a substantial lessening of competition for DJ software, resulting in price rises to consumers and/or a lower quality software offering.”
He further cited the issue that “the merger could give ATC (AlphaTheta Corporation) the means to either eliminate or worsen DJ hardware rivals’ ability to integrate their products with Serato. We were also concerned the merger would provide ATC with access to its DJ hardware rivals’ commercially sensitive information.”
AlphaTheta Serato Merger: InMusic’s Ire
This latter reason was a major sticking point for chief rival InMusic, which owns DJ brands like Denon DJ, Rane, Stanton and Numark. “When we work with Serato, we give them our product up to a year ahead of time so they can analyze it and put the software in,” said Jack O’Donnell, Chief Executive of InMusic, to The Auckland Post. “If I was handing it to the new dominant player, I’m essentially handing it to my competitor.”
AlphaTheta Serato Merger: “We are disappointed”
Given that the proposed AlphaTheta Serato merger was friendly, it’s understandable that the two companies would be disappointed by the NZCC’s decision.
“While it’s not the decision we wanted, the Serato business has never been in a better place, and neither has our relationship with AlphaTheta,” said Young Ly, CEO, Serato in a joint press release with AlphaTheta.
“Regardless of the disappointing outcome of the judgment, we remain excited about the future,” said Yoshinori Kataoka, President, and CEO, AlphaTheta.
AlphaTheta Serato Merger Deal Blocked: Is it a Good Thing?
I’m not a business expert. I’m just a guy who likes to talk about gear. But in my half a century on this planet, I have noticed that monopolies tend not to result in better and more affordable products for consumers. With the two companies separate, they can continue to work together as before, with AlphaTheta/Pioneer DJ gear remaining Serato-compatible and consumers able to choose which software they prefer to use.
What do you think? Are you, like ATC and Serato, disappointed by the decision? Let us know in the comments.
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