A SCOTTISH company that helps bands such as Madness and Stereophonics make money on internet sales has been bought by a US technology group, creating a windfall for its founders and shareholders.
Arbinet, which develops online charging systems, snapped up Flowphonics, a media rights company which was set up less than a year ago, in a deal which is expected to generate more work for the Glasgow firm. The beneficiaries include founders Gavin Robertson and Gordon Rintoul and a group of private investors including TVI, the public relations company.
Robertson is a media rights expert and Rintoul is a music producer who has made records for Paul Weller and Tori Amos.
Arbinet, based in New Jersey, was particularly keen to get hold of Flowphonics' Rightsrouter system, which allows music makers to manage and sell their songs through online services such as iTune and Napster. The system is used by record companies including V2, home to Madness, Stereophonics and the Cribs.
Robertson, managing director of Flowphonics, said: "Arbinet brings the capabilities to help us take this business to the next level. Our pioneering platform and media relationships, combined with Arbinet's advanced electronic exchange platform, automated clearing and settlement capabilities, and their more than 700 members, creates the most powerful offering in this space."
The Rightsrouter technology was spun out of new media company Musicindie in 2004 with support from Incubix, a Swiss investment firm, and Scottish Development International.
Flowphonics was set up in Glasgow in January.
Curt Hockemeier, Arbinet's chief executive, said: "Content licensing exhibits the same high degree of fragmentation, lack of transparency and time-consuming manual negotiation process we saw in telecommunications. Simplifying the way rights are discovered, licensed and digitally distributed, with rights owners getting paid timely, is of growing importance and a key element of our digital media strategy.
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Music downloading is a fast-growing industry.
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