2 ergo Group plc
24 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, is
pleased to announce that it has formed a joint venture (JV) with The Music
Factory Entertainment Group (The Music Factory), to provide a range of unique
entertainment solutions to mobile phone users.
The agreement will allow mobile phone users to access a wide range of
entertainment content from The Music Factory's back catalogue of musical content
spanning 30 years. Under the terms of the JV 2ergo will hold a majority
shareholding 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 The
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 the
widest and most comprehensive ranges of musical content available on the market,
including ring tones, polyphonic tones, real tones and true tones. The Group
will distribute this catalogue of music to the mobile end user through its
established network of customers, which comprises some of the most respected
providers of mobile content in the market place. In the US however, the content
delivery will be handled directly by the Group, as it believes this market does
not yet posses a sufficient 'middle-tier' of content deliverers.
The catalogue consists of sound-a-like versions of classic hits, a format
becoming increasingly popular amongst mobile users and film companies. The songs
are accurate replicas of the originals providing significant cost advantages by
simplifying the licensing arrangements and clearance process on a worldwide
The Music Factory is also one of the largest producers of karaoke content within
Europe and the JV will enable 2ergo to explore new market opportunities in the
US and also Asia, a region known for its passion for mobile content,
specifically karaoke. Asia is an area of significant opportunity for mobile
content providers and The Music Factory's catalogue of western pop artists is
likely to have widespread appeal.
2ergo has been offering its delivery and billing services to mobile content
sales organisations for many years now. As the market matures, gaps have
appeared for a professional wholesale content provider with extensive catalogues
of mobile phone compatible content to support these organisations.
In response and in anticipation of this growing opportunity 2ergo has been
aggressively developing such a comprehensive service by selective acquisition.
The results of which has lead to the recent launch of the 2ergo Content
Catalogue, coupled with an end-to-end service encompassing the provision of
mobile content, its world wide delivery and importantly, a secure billing
2ergo will offer these services as a 'white label' package to its existing
clients and as a fully managed solution to brand owners who have not yet entered
the mobile market, but who are increasingly seeing the benefits of doing so.
This positioning will further enhance 2ergo in the sales value chain and provide
an 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 with
one of the most comprehensive content catalogues available, but at a fraction of
the 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 Factory
has been established as it will enable 2ergo to provide an even greater range of
unique entertainment solutions across every entertainment genre to new and
existing clients. We see karaoke having the potential to be the next 'Killer
App' on the mobile phone and this partnership allows us to pioneer the way into
We believe that this content will fill a gap in the market caused by the current
over-pricing by the music companies. Our offering should prove successful as
mobile phone companies and network providers look to extract sales from new
Peter Parkin, Chief Executive of the Music Factory commented:
'At present we supply a range of entertainment solutions to over 30 customer
contracts, however the joint venture with 2ergo will now enable us to supply
music content to an even greater number of customers through 2ergo's diverse and
ever-growing international channel network.'
For further information, please contact:
2ergo 01706 221777
Neale Graham, Joint Managing Director
Barry Sharples, Joint Managing Director
Tavistock Communications 020 7920 3150
Notes to Editors:
About 2ergo group plc
2ergo group plc facilitates communication and interaction between companies and
their staff or customers using Mobile Internet, SMS, MMS, Web and Voice
Applications. Headquartered in Lancashire, the Company listed on AIM on 11 March
About The Music Factory Entertainment Group
Founded in 1983, The Music Factory Entertainment Group has evolved from an
established and very successful music production company into a unique provider
of entertainment solutions.
For over 20 years, millions of record sales have underlined their vital
understanding of the marketplaces they operate in. The experience gained over
these years has helped forge a group of companies with the ability to unlock the
ever present and vast potential within the exciting and varied world of
The Music Factory has extensive relationships with many of the leading
entertainment groups, including Sony BMG, Virgin EMI, Warner Music and Universal
Music. The Group has often been the supplier of music to film companies, who
otherwise could not obtain the rights to particular tracks, including Disney's
Touchtone Productions for use in the feature film, Enemy of the State, with Will
Smith and Gene Hackman.
The Music Factory is the largest supplier of karaoke music in the UK through its
own brand and also through licensing deals with Freemantle for Pop Idol and Emap
for Smash Hits. Finally, The Music Factory still holds the Guinness World Record
for the fastest three consecutive No. 1s by a new artist with Jive Bunny and the
Master 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