HP Buys Melodeo, Gains NuTsie Music Service

Does HP's acquisition of Melodeo and its music streaming application nuTsie, coming on the heels of its purchase of struggling smartphone maker Palm, suggest the company is making plans to challenge Apple in the smartphone space?

Hewlett-Packard, the world's largest technology company, confirmed the acquisition of music streaming company Melodeo, first reported in the technology blog TechCrunch. The move follows HP's recent acquisition of struggling smartphone maker Palm and suggests the company is looking to go after Apple, which recently bought LaLa, a competing music-streaming site. HP did not disclose the financial terms of the deal, although an anonymous source quoted in TechCrunch put the figure between $30 million and $35 million.
Based in Seattle, Melodeo offers an application called nuTsie that allows users to stream songs from their iTunes collection onto various smartphones, including Google Android-based phones, BlackBerry devices and the iPhone. The 7-year-old company also offers iPhone games and featured playlists by friends and Melodeo. However, if the company does not have the rights to a certain track it cannot be played. Pricing structure ranges depending on the carrier or platform; the Android app costs users a one-time fee of $9.99, while Verizon offers the service for $2.99 a month.
"HP confirms that it has acquired Melodeo, a privately held company that provides cloud-based delivery systems for content across multiple devices," the company said in a release. "HP's acquisition of Melodeo is another example of our efforts to bring new, innovative technologies to market. We are excited about the potential of this technology to bring the power of cloud-based delivery services to millions of customers."
The Melodeo team is partially comprised of members from Tegic Communications, who developed the T9 text-entry software in addition to the AOL and ICQ instant messaging software for mobile phones. The Melodeo product client also contains open source components from HP, such as permission to use, copy, modify, distribute and sell the software and its documentation for any purpose without a fee. TechCruch quoted a source putting Melodeo's site visits at 2 million unique visitors per month with more than 2 millino downloads of its nuTsie apps.
Apple-owned Lala, which recently inked deals with Google and social networking behemoth Facebook, offers a library of 8 million songs, which it allows its users to stream once for free, and also sells unlimited streams for 10 cents per track and MP3 downloads starting at 79 cents. In comparison, Spotify boasts a library of approximately 6 million tracks, while iTunes offers 11 million tracks and sells individual MP3s for $1.29.