BlackBerry and 7digital strike deal to launch new music service

Digital music firm announces deal thought to be worth £1m-plus after its share price halved weeks after AIM stock market launch.

7 digital has struck a music deal thought to be worth £1m-plus with BlackBerry to launch a new music service, two months after its share price nose-dived following the troubled Canadian smartphone company shutting its music and video app store.

Digital music company 7 digital saw its share price almost halve weeks after launching on the AIM stock market, when major customer BlackBerry announced it was closing the music and video app sections of BlackBerry World.

BlackBerry instead struck a licensing deal with Amazon, giving its users access to its apps.

7digital’s efforts to appease investors, with an announcement about talks with BlackBerry for an alternative music service, failed to calm investors. However, on Thursday, the company unveiled a new deal to continue offering BlackBerry customers a music service up until August 2015.

In addition, 7digital will take over the sales of music from BlackBerry – which had previously been shared – which means it will retain all profits from the track sales.

“We are pleased to have agreed new terms with BlackBerry to provide its users with access to music,” said Simon Cole, chief executive of 7digital. “This arrangement ensures both the continuation of our relationship with BlackBerry and our ability to sell music to its users.”

7digital listed on the AIM market on 10 June following a £30m reverse takeover by multimedia content company UBC. The company began trading at about 29p, climbing to as high as 33p. However, following the announcement on 1 July that BlackBerry was changing its service, 7digital’s share price dropped as low as 13.3p.

In June, 7digital struck a deal with mobile company ROK to provide a music streaming service.

The guardian.com


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