MXCP.L Regulatory News (MXCP)

24 Oct 2005 07:00

2 ergo Group plc24 October 2005 Embargoed until 07.00 24 October 2005 2ergo group plc ("2ergo" or "the Group") Launch of Joint Venture 2ERGO ANNOUNCES JOINT VENTURE WITH ENTERTAINMENT SOLUTIONS COMPANY 2ergo, the AIM listed provider of convergent mobile communication solutions, ispleased to announce that it has formed a joint venture (JV) with The MusicFactory Entertainment Group (The Music Factory), to provide a range of uniqueentertainment solutions to mobile phone users. The agreement will allow mobile phone users to access a wide range ofentertainment content from The Music Factory's back catalogue of musical contentspanning 30 years. Under the terms of the JV 2ergo will hold a majorityshareholding of 51%, with the remaining 49% being held by The Music Factory.2ergo has a 10-year option to purchase the remaining stake in the JV from TheMusic Factory. The venture will provide 2ergo with an extensive catalogue of music hits,comprising over 10,000 titles, enabling 2ergo to offer its customers one of thewidest and most comprehensive ranges of musical content available on the market,including ring tones, polyphonic tones, real tones and true tones. The Groupwill distribute this catalogue of music to the mobile end user through itsestablished network of customers, which comprises some of the most respectedproviders of mobile content in the market place. In the US however, the contentdelivery will be handled directly by the Group, as it believes this market doesnot yet posses a sufficient "middle-tier" of content deliverers. The catalogue consists of sound-a-like versions of classic hits, a formatbecoming increasingly popular amongst mobile users and film companies. The songsare accurate replicas of the originals providing significant cost advantages bysimplifying the licensing arrangements and clearance process on a worldwidebasis. The Music Factory is also one of the largest producers of karaoke content withinEurope and the JV will enable 2ergo to explore new market opportunities in theUS and also Asia, a region known for its passion for mobile content,specifically karaoke. Asia is an area of significant opportunity for mobilecontent providers and The Music Factory's catalogue of western pop artists islikely to have widespread appeal. 2ergo has been offering its delivery and billing services to mobile contentsales organisations for many years now. As the market matures, gaps haveappeared for a professional wholesale content provider with extensive cataloguesof mobile phone compatible content to support these organisations. In response and in anticipation of this growing opportunity 2ergo has beenaggressively developing such a comprehensive service by selective acquisition.The results of which has lead to the recent launch of the 2ergo ContentCatalogue, coupled with an end-to-end service encompassing the provision ofmobile content, its world wide delivery and importantly, a secure billingplatform. 2ergo will offer these services as a "white label" package to its existingclients and as a fully managed solution to brand owners who have not yet enteredthe mobile market, but who are increasingly seeing the benefits of doing so.This positioning will further enhance 2ergo in the sales value chain and providean increase in the size of each transaction that the Group retains for itself. This service also fully underpins the Group's US operations by providing it withone of the most comprehensive content catalogues available, but at a fraction ofthe price it would have to pay if it were a stand-alone entity. Barry Sharples, Joint MD of 2ergo commented: "We are delighted that the joint venture between ourselves and The Music Factoryhas been established as it will enable 2ergo to provide an even greater range ofunique entertainment solutions across every entertainment genre to new andexisting clients. We see karaoke having the potential to be the next 'KillerApp' on the mobile phone and this partnership allows us to pioneer the way intothis market. We believe that this content will fill a gap in the market caused by the currentover-pricing by the music companies. Our offering should prove successful asmobile phone companies and network providers look to extract sales from newrevenue streams." Peter Parkin, Chief Executive of the Music Factory commented: "At present we supply a range of entertainment solutions to over 30 customercontracts, however the joint venture with 2ergo will now enable us to supplymusic content to an even greater number of customers through 2ergo's diverse andever-growing international channel network." -ends- For further information, please contact: 2ergo 01706 221777Neale Graham, Joint Managing DirectorBarry Sharples, Joint Managing Director Tavistock Communications 020 7920 3150Christian Taylor-WilkinsonMatt Ridsdale Notes to Editors: About 2ergo group plc2ergo group plc facilitates communication and interaction between companies andtheir staff or customers using Mobile Internet, SMS, MMS, Web and VoiceApplications. Headquartered in Lancashire, the Company listed on AIM on 11 March2004. About The Music Factory Entertainment GroupFounded in 1983, The Music Factory Entertainment Group has evolved from anestablished and very successful music production company into a unique providerof entertainment solutions. For over 20 years, millions of record sales have underlined their vitalunderstanding of the marketplaces they operate in. The experience gained overthese years has helped forge a group of companies with the ability to unlock theever present and vast potential within the exciting and varied world ofentertainment. The Music Factory has extensive relationships with many of the leadingentertainment groups, including Sony BMG, Virgin EMI, Warner Music and UniversalMusic. The Group has often been the supplier of music to film companies, whootherwise could not obtain the rights to particular tracks, including Disney'sTouchtone Productions for use in the feature film, Enemy of the State, with WillSmith and Gene Hackman. The Music Factory is the largest supplier of karaoke music in the UK through itsown brand and also through licensing deals with Freemantle for Pop Idol and Emapfor Smash Hits. Finally, The Music Factory still holds the Guinness World Recordfor the fastest three consecutive No. 1s by a new artist with Jive Bunny and theMaster Mixers, which has gone on to sell over 15 million copies worldwwide. This information is provided by RNS The company news service from the London Stock Exchange