Musical instrument giant Yamaha will acquire 100% of Steinberg GmbH,
including Steinberg USA, in a closed competitive bidding deal announced
yesterday. Steinberg is developer of software products like Cubase and
Nuendo. The purchase isn't a surprise: Steinberg and Yamaha
collaborated on integrating Yamaha gear with Steinberg software via
Studio Connections, integration that's likely to deepen under this
deal, and many observers expected Pinnacle to sell Steinberg, which it
acquired in January 2003. (click 'read more' for analysis)

Consider, however, the number of software developers now tied to
hardware development. Aside from Avid/Digidesign's ownership of
hardware maker M-Audio, there's:

  • Former Emagic: Owned by Apple
  • Acid, plugins: Owned by Sony
  • Digital Performer: Developed by MOTU, also an interface manufacturer
  • Cakewalk: Strategic alliance with Roland

Of those, the Apple-Emagic, Sony-Sonic Foundry, and Digidesign-M-Audio
deals all took place in the last two years. At the same time, this
purchase underlies the fact that video-audio tie-ins aren't as big a
story as some hoped. Video production company Pinnacle hoped to
leverage that angle with Steinberg, even though Steinberg had always
been a music company. Other than the Soundtrack application that ships
with Final Cut Pro, Apple's ownership of Emagic has delivered far more
music synergy than video synergy, and Digidesign's associations are
stronger with music, particularly with the addition of M-Audio, than
video production maker Avid.

Instead, the clear story here is that, while software sales have been
mostly flat, music production and hardware sales is way up.
Manufacturers are looking for big growth in the music market in coming
years. I'm looking forward to it.