US audio equipment manufacturer InMusic has confirmed it is considering taking legal action in a number of territories to block the acquisition of Serato by Pioneer DJ's parent company.
AlphaTheta Corporation confirmed a deal worth more than $100million for the Auckland-based music software company in July. The Japanese electronics giant now needs approval from the New Zealand Overseas Investment Office to proceed.
If that happens, the world's two dominant digital DJ and production platforms — Serato and rekordbox DJ, accounting for a combined 90% market share - would be owned by the same conglomerate. Concerns have been raised this effectively eliminates competition, which would be detrimental to innovation, and end users.
InMusic has now launched a publicity campaign to raise awareness of the controversial buyout. Advertorials appeared in New Zealand media on Thursday 24th August, and explained a 20 year partnership with Serato would be forced to end if the deal goes ahead, as Pioneer is a direct manufacturing rival. Meanwhile, developing alternative software in-house could take years.
“When we work with Serato, we give them our product up to a year ahead of time so they can analyse it and put the software in. If I was handing it to the new dominant player, I'm essentially handing it to my competitor," Jack O'Donnell, Chief Executive of InMusic, told The Auckland Post.
“I am quite confident what's happening here and it's an outrage as far as I'm concerned," he continued. “In any market when you eliminate competition, it has an effect on consumers. It's going to raise prices, eliminate innovation and limit choice. So it's a big thing for a small industry.”