Rioport, the company that introduced the first portable MP3 player, thereby earning the wrath of the RIAA back when Napster was just a twinkle in Shawn Fanning’s eye, has agreed to be acquired by three-year-old interactive media network/digital jukebox operator Ecast.

The combined companies will operate under the Ecast name, with Ecast CEO Robbie Vann-Adibe continuing in his post, and Rioport President/CEO Jim Long becoming GM of Ecast’s Rioport division. Financial terms of the deal were not disclosed.

In an interesting twist, however, Ecast has announced a development as unusual in 2002 as shrinking share prices in 1999: The company has actually closed on $14 million in new venture capital, provided by Oak Investment Partners and Doll Capital Management.

Rioport, in recent years, has focused on distributing music downloads online for all the major record labels and for “e-tailers” including BestBuy.com. Ecast, meanwhile, has focused on public-venue systems including pay-per-play digital jukeboxes and entertainment consoles, partnering with Leisure Link, a top amusement equipment operator. Together, the companies plan to exploit cross-promotional and merchandising opportunities to enhance their separate corporate missions.

"This merger creates a broader platform for the delivery of digital content and positions Ecast as a stronger service partner for all our customers—content owners, operators, e-tailers, and consumer electronics manufacturers," said Vann-Adibe. "Both Ecast and RioPort have proven our abilities to execute against the rapidly emerging digital media opportunity in our respective markets and we look forward to creating synergies that will benefit our customers and consumers worldwide." Gosh, that sounds purdy, whatever it means.

"Both RioPort and Ecast have built strong relationships with key partners and developed the underlying services and technologies that our customers need as the content distribution business moves to digital delivery," said Long. "The new Ecast is now a financially stronger company with the resources and expertise in place to become the leading digital media delivery network for all our constituencies." Thank you, Senator.

"The RioPort-Ecast merger paves the way for some very interesting opportunities in digital music delivery," said Ted Cohen, vice president of Digital Development and Distribution, EMI Recorded Music. "EMI has partnered with both companies in the digital delivery arena and we look forward to working with them to explore integrated initiatives that combine their in- and out-of home platform to merchandise and promote EMI artists."