React Group Regulatory News (REAT)

30 Nov 2006 12:29

For immediate release: 30 November 2006

X-Phonics Plc ("X-Phonics" or the "Company") Record Label Signing & Senior Appointment Record Label

X-Phonics, the independent music and media group, is pleased to announce the signing of "The Poems" to its record label.

The Poems, for which X-Phonics now has rights to markets excluding the US and Canada, where they are signed to renowned indie label Minty Fresh Records, are already enjoying success in the US with their first album "Young America". Their Track "Ballad of a Bitter End" has featured on the television hit drama series Gray's Anatomy. X-Phonics intends to build on the popularity of The Poems in the US by, releasing "Young America" into other territories as well as further albums on a revenue sharing deal.

Music Publishing

The Company is also pleased to announce the appointment of Bobby Bluebell to its Music Publishing Division (song writing).

Bobby Bluebell is an accomplished songwriter of rock and pop genre who has written hits for such well known artists as "Texas," "Shakespeare's Sister" and the Company's newly signed band "The Poems." Under the terms of the agreement X-Phonics will earn a revenue split not only from all of Bobby Bluebell's future publishing but also his existing out-of-contract publishing.

Bobby Bluebell will join a growing team of talented song writers in X-Phonics' new Music Publishing and Recording facilities in both London and Glasgow being headed up by Chief Executive, John McLaughlin. As well as continuing to create his own material, it is expected that Bobby Bluebell will also be instrumental in writing for artists signed to X-Phonics' label and third party work commissioned to X-Phonics.

John McLaughlin, Chief Executive, commented,

"These are key signings for our publishing division and record label. Not only do I expect Bobby to generate some attractive revenues for the Company from his proven publishing abilities but I also believe his presence in the group will act as an additional incentive for high calibre artists, like The Poems, to sign to our record label."

For further information please contact,

John McLaughlin, Chief Executive

X-Phonics PlcTel. 07795 824013Mike Hosie, Finance DirectorTel. 07860 500001Ben Simons/Chris RobertsHansard GroupTel. 020 7245 1100Notes to Editors

X-Phonics is an independent music and media group that has and is developing opportunities across all aspects of the industry in a way that creates and maximises returns from the relationships between its artists and writers and through other synergies.

X-Phonics has a number of artists who have been contracted to the Company because of their potential to be developed within the business for the longer term or because they are perceived to have broader appeal which can be delivered earlier to the market in partnership with larger record labels.

Working with the Company's artists are a number of song writers who can collaborate or who work individually and who also work on external projects. The Company has signed a number of well known writers who bring with them catalogues of previous work which can be further exploited by the Company and who will attract other commissions and artists with whom to work. It is the Company's intention to build a rosta of writers and to own and build a catalogue of songs which will generate revenues over the longer term.

The Company has two additional activities and resources that both support the record label and publishing activities and that generate external income.

It has an audio recording facility which is made available to its artists and writers to facilitate and support the development of in-house projects as well as being made available to external chargeable clients. It also has access to a state of the art, fully specified recording studio facility which compliments the Company's internal facilities.

There is also a broadcast quality video editing facility which allows promotional requirements of the artists to be met in a cost effective and fully controlled manner as well as offering the opportunity of being commissioned for the production of external video and film work.

The synergistic nature of the business is worth re-iterating. Not only does each of the business areas generate projects and revenues in their own right but wherever possible complimentary revenue streams are sought through the involvement of other aspects of the Company in the projects. As an example, an artist can be working with the Company's writers allowing the Company to share in the publishing revenues as well as in the record label revenues that accrue from the promotion and marketing of the artist's album. Recording of the album would be completed using the Company's in-house recording facilities and if appropriate a promotional video could be produced using the Company's video capabilities.

By adopting this business model the Company can maximise its opportunity of revenues or a revenue share at each stage of the artistic process.