New York, NY – May 23, 2009 – The royalty processing and licensing company RightsFlow has formed a strategic partnership with Muzak to help manage the latter’s licensing and accounting. RightsFlow, a New York-based company that launched in October 2007, will supplement the efforts of Muzak’s in-house licensing staff. The deal comes three months after the Fort Mill, S.C.-based Muzak, which provides music to 400,000 retail stores, filed Feb. 10 for Chapter 11 bankruptcy protection.

“During this important time in Muzak’s history, we are continuing to invest in partnerships and ventures that enhance the productivity of our business,” Muzak CEO Stephen Villa said in a statement.

RightsFlow says it will help streamline the licensing, accounting and payment of publishing royalties by Muzak’s U.S. music distribution operations.
“We are creating streamlined efficiency in an archaic market where payments typically lagged performance,” RightsFlow CEO Patrick Sullivan said.
RightsFlow clients include E1 Entertainment, imeem, the Independent Online Distribution Alliance, Audible Magic and Disc Makers. The company is among the service providers that have emerged to assist digital music vendors, distributors and other companies license, account and pay royalties to songwriters, copyright holders and master rights holders. The Harry Fox Agency and Music Reports have also been expanding their capabilities in this area.

According to court documents, Muzak owes at least $435 million in liabilities. About $360 million of that amount it owed to bond holders, while music publishers and performance and mechanical rights organizations among the company’s 30 largest creditors are owed a combined $1.5 million, according to court documents filed at the company’s Chapter 11 administration site. Moreover, a motion to pay $1.7 million to critical vendors, which appears to include certain music publishers and rights organizations, has been approved by the court.

“We are confident,” Villa said, “that we are taking the right steps to position Muzak for success and to achieve returns over the long term.”