2023 acquisition season continues. The latest is the complete acquisition of DJ vendor Serato Audio Research by AlphaTheta; AlphaTheta is best known for the Pioneer DJ brand.
This one is pretty easy to explain: with the dominance Pioneer DJ has via its mixers, hardware players, all-in-one hardware, controller hardware, and Rekordbox software, there’s not a lot of room to grow market share other than through an acquisition. Serato DJ has historically had strong presence in the USA and southeast Asia, among some 190 countries their products operate. Pioneer and Serato were also long-time collaborators, with Pioneer DJ hardware providing Serato software integration.
This does mean still less competition and more domination in the DJ market, which makes this one to watch for consumers. There’s also a significant amount of overlap between Pioneer DJ’s Rekordbox controller/software offerings and the Serato hardware/software combination, even those using Pioneer’s own hardware. But Serato also offers some technologies Pioneer DJ lacks, including some live visual/video functionality and AI-based source separation. Their sampling and pitch and time manipulation tools are also substantial. And they make the unique Serato Studio production tool. I wrote about the new AI features in Serato DJ for Resident Advisor in my review of Serato Stems.
AlphaTheta’s release reveals very little, other than the Serato DJ and Pioneer DJ brands will remain separate. There’s no word on what leadership if any will remain at Serato DJ, which is headquartered in Auckland, NZ.
AlphaTheta’s parent is a fairly traditional Japanese conglomerate, traded publicly on the Tokyo Stock Exchange, Nōritsu Kōki Kabushiki-gaisha. Noritsu got its start back in 1951 with an automatic water rinsing machine for photographic paper – one that apparently can work even in a power outage (thanks to being water powered). I would differentiate this, then, from the private equity buyout of music production that Benn Jordan predicts in a recent video. The larger trend here is acquisitions, but those can take the form of consolidation as well as equity investment.
(updated) What competition remains? Well, that’ll largely be Denon, Rane, and Numark — all three brands owned by parent InMusic. The nearest head-to-head software competitor had been Traktor DJ from Native Instruments, but that product has seen its development team slashed and its once-innovative iOS offering abandoned. There are also various software-only competitors, but none with the kind of hardware integration that Serato (or NI, historically) had. The most interesting is probably Algoriddim, whose djay product does work with a lot of hardware and neatly stakes out the entry level.
There’s also been various speculation about whether this makes the co-licensing deals between Serato and the InMusic brands (like Rane) awkward. I’d guess that that’s part of the value that Pioneer DJ is acquiring here; as long as it’s making both companies money, you shouldn’t expect it to change.
But this is the end of an era for yet another independent business; Serato had operated for 25 years. I wish the best to all our friends and colleagues at Serato for whatever comes next.