Muzak(Redirected from Muzak Holdings)
Muzak is a brand of background music played in retail stores and other public establishments. In 1981, Westinghouse bought the company and ran it until selling it to the Fields Company of Chicago, publishers of the Chicago Sun-Times, on September 8, 1986. Formerly owned by Muzak Holdings, the brand was purchased in 2011 by Mood Media in a deal worth US$345 million.
The word Muzak has been a registered trademark since December 21, 1954 of Muzak LLC, although it dominated the market for so many years that the term is often used (especially when used with lowercase spelling) as a generic term for all background music. The term Muzak is – at least in the United States – often used as a term for most forms of background music, regardless of the source of the music, and may also be known as "elevator music" or "lift music". Though Muzak Holdings was for many years the best known supplier of background music, and is commonly associated with elevator music, the company did not itself supply music to elevators. Since 1997, Muzak has used original artists for its music source, except on the Environmental channel.
Inventor Major General George Owen Squier, credited with inventing telephone carrier multiplexing in 1910, developed the original technical basis for Muzak. He is known for what today is called Muzak.
In the early 1920s, he was granted several further US patents related to transmission of information signals, among them a system for the transmission and distribution of signals over electrical lines.
Squier recognized the potential for this technology to be used to deliver music to listeners without the use of radio, which at the time was in early state and required fussy and expensive equipment. Early successful tests were performed, delivering music to customers on New York's Staten Island via their electrical wires.
In 1922, the rights to Squier's patents were acquired by the North American Company utility conglomerate, which created the firm Wired Radio Inc. to deliver music to their customers, charging them for music on their electric bill. By the 1930s radio had made great advances, and households began listening to broadcasts picked up through the airwaves for free, supported by advertising.
Squier remained involved in the project, but as the home market became eclipsed by radio in 1934 he changed the direction of the company to deliver music to commercial clients. He was intrigued by the made-up word Kodak being used as a trademark and so took the first syllable from "music" and added the "ak" from "Kodak" to create the name Muzak which became the new name of the company.
In 1937, the Muzak division was purchased from the North American Company by Warner Bros., which expanded it into other cities. It was bought by entrepreneur William Benton who wanted to introduce Muzak into new markets like barber shops and doctors' offices. While Muzak had initially produced tens of thousands of original artist recordings by the top performers of the late 1930s and 1940s, their new strategy required a different sound.
The company began customizing the pace and style of the music provided throughout the workday in an effort to maintain productivity. The music was programmed in 15-minute blocks, gradually getting faster in tempo and louder and brassier in instrumentation, to encourage workers to speed up their pace. Following the completion of a 15-minute segment, the music would fall silent for 15 minutes. This was partly done for technical reasons, but company-funded research also showed that alternating music with silence limited listener fatigue, and made the "stimulus" effect of Stimulus Progression more effective.
This was the time when Muzak began recording their own orchestra—actually a number of orchestras in studios around the country, indeed around the world—composed of top local studio musicians. This allowed them to strictly control all aspects of the music for insertion into specific slots in the Stimulus Progression programs.
A growing awareness among the public that Muzak was targeted to manipulate behavior resulted in a backlash, including accusations of being a brainwashing technique and court challenges in the 1950s. However, the popularity of Muzak remained high through the mid-1960s. President Dwight D. Eisenhower was the first president to pump Muzak into the West Wing, and Lyndon B. Johnson owned the Muzak franchise in Austin, Texas. NASA reportedly used Muzak in many of its space missions to soothe astronauts and occupy periods of inactivity.
Original artist programmingEdit
With the rise in youth culture and the growing influence of the baby boomer generation in the 1960s and 1970s, Muzak saw their popularity decline and market share erode, in favor of newer "foreground music" companies such as AEI Music Network Inc. and Yesco that offered so-called "original artist music programming." These businesses licensed the original recordings, instead of instrumental re-recordings, and included vocal music. Every style of music was offered, from rock and pop to Spanish-language programming (for Mexican restaurants), jazz, blues, classical and even "easy listening." Foreground music markets included restaurants, fashion stores, retail outlets, malls, dental offices, airlines, and public spaces. When Muzak began programming original artists in 1984, it was after merging with Yesco, and the programming was done by Yesco. This necessitated abandonment of the Stimulus Progression concept.
New business modelEdit
During this time Muzak became a franchise operation, with local offices each purchasing individual rights to the music, delivery technology, and brand name for their geographic areas. The company changed hands several times, becoming a division of the Field Corporation in the mid-1980s.
Through the 1980s and 1990s, Muzak moved away from the “elevator music” approach, and instead began to offer multiple specialized channels of popular music. Muzak pioneered "audio architecture", a process of designing custom music playlists for specific customers.
Even with the changes in format, rocker Ted Nugent used Muzak as an icon of everything "uncool" about music. In 1986, he publicly made a $10 million bid to purchase the company with the stated intent of shutting it down. "Muzak is an evil force in today's society, causing people to lapse into uncontrollable fits of blandness," Nugent said. "It's been responsible for ruining some of the best minds of our generation." His bid was refused.
By the late 1990s, the Muzak corporation had largely rebranded itself; as of 2010, Muzak distributed 3 million commercially available original artist songs. It offered almost 100 channels of music via satellite or IP delivery, in addition to completely custom music programs tailored to their customers' needs.
According to EchoStar, one of Muzak's distribution providers, Muzak's business music service was broadcast on rented bandwidth from Echostar VII, in geostationary orbit at 119 degrees west longitude. Other rented bandwidth included an analog service on Galaxy 3C and a digital service on SES-3.
On April 12, 2007, Muzak Holdings, LLC announced to its employees that it might merge with DMX Music. This merger was approved by the Department of Justice Antitrust Division one year later. However, by April 2009, the deal appeared to have faltered.
On January 23, 2009, a spokesperson said Muzak was attempting to restructure its debt and filing for bankruptcy was one of several options. The company had ample cash, but had large amounts of debt coming due in the midst of a difficult economic climate.
On February 10, 2009, Muzak Holdings LLC filed for Chapter 11 bankruptcy protection. Kirkland & Ellis was hired as the company's bankruptcy law firm. Moelis & Company served as the financial adviser.
On September 10, 2009, Muzak said it had filed a reorganization plan which would cut the company's debt by more than 50%. The plan would pay all banks everything they were owed in some form, and would give high-ranking unsecured creditors ownership in the reorganized company. Other creditors would receive warrants to buy stock. The company said an "overwhelming majority" of unsecured creditors supported the plan.
History of Muzak Holdings LLCEdit
Following bankruptcy, the company announced an initiative to realign their corporate structure into three specialized business units: Muzak Media; Touch, a Muzak Co.; and Muzak Systems. These units will focus on content acquisition, Sensory Branding and new delivery platform technology.
Founded in 2004, Mood Media had a market capitalization of about $380 million as of 2011. In March 2011, Mood Media agreed to purchase Muzak Holdings for $345 million. Although Muzak first appeared in 1934, it had its largest impact in the 1960s and 1970s. In 2013, Mood Media announced it would be consolidating its services under the name Mood, ceasing to use the Muzak brand name. Muzak provided background music to over 300,000 US locations and made most of its money through multi-year contracts. Now, the company provides on-hold messaging and video programming, although piped music remains its forte. Mood hopes to use Muzak's US footprint to introduce more digital services. In May 2017, Mood Media filed for Chapter 15 bankruptcy protection in an attempt to restructure their debt. The following month the company was acquired by Apollo Global Management and GSO Capital Partners. In August 2017, Mood Media announced a new partnership with music licensing platform Songtradr.
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