New business model
Muzak was, since the 1940s, a franchise operation, with local offices each purchasing performance licenses for subscribers to the music, delivery technology, and brand name for their geographic areas. The company (franchisor) changed hands several times, becoming a division of the Field Corporation in the mid-1980s.[25]
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.
During the transition to popular music, the Stimulus Progression format continued to be offered through the Environmental channel.[26] Muzak shifted away from large orchestras and began recording covers with local Seattle artists, such as Lennie Moore, Donny Marrow, and John Morton.[27] Instead of creating unique renditions, covers were arranged to sound similar to the original, with vocals being replaced by either a piano, woodwind, or guitar.[28] In 1987, Muzak established relations with Donny Marrow of Disk Eyes Productions to produce the majority of the cover library for the Environmental channel, and to serve as their primary A&R consultant.[29] By 1999, the Environmental channel had over 5000 tracks.[26]
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 Muzak's then-owner, the Westinghouse Electric Corporation.[30]
By the late 1990s, the Muzak corporation had largely rebranded itself. As of 2010, Muzak distributed 3 million commercially available original artist songs.[31] 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.[32]
On April 12, 2007, Muzak Holdings LLC announced to its employees that it might merge with DMX Music.[33] This merger was approved by the Department of Justice Antitrust Division one year later.[34] However, by April 2009, the deal appeared to have faltered.[35]
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.[36]
