Cisco Steps Onto the Music Business Stage

Cisco Systems is known for a lot of things, mostly the boring (but important) components that keep the Internet humming along — servers, routers and other high-end networking equipment.

More recently, the San Jose company raised eyebrows with its $590 million acquisition of Flip digital camcorder-maker Pure Digital Technologies. A Cisco employee casually mentioned to me the reasoning behind the deal: Those cheap, tiny camcorders drive more Web-based video, which in turn drives more bandwidth usage, finally resulting in more purchases of high-end networking equipment.

I know, brilliant, eh? Now add the music industry to its list of business interests, which I suspect is being pursued for similar reasons (think streaming audio and video). The San Jose Mercury News reported on Cisco's new Eos Social Entertainment software platform, targeted to entertainment companies that want to host their own networking sites for artists.

The idea is to help close the gap between musicians and their fans and, as the article points out, "it will help media companies capitalize on the digital era and restore revenue declines from piracy and changing consumer behavior, such as ditching higher-margin music CDs for single songs bought online."

Here's a YouTube video of a promotional video for the new software:

And if all of these new fan sites drive more Web usage, then Cisco also has a full lineup of servers, routers and other high-end networking gear for sale. It's a smart move toward vertical integration without drawing too much attention to their less-exciting, but more-profitable businesses.

But for music fans, it means more content and more information from your favorite musicians. Everyone wins! At least in theory.

Image courtesy of Cisco Systems