Warner, BMG launch digital venture

Labels team to target Russian mobile market

MOSCOW — Warner Music and Sony BMG have partnered with Russian industrial group, Access Industries, and local record labels Soyuz and Nikitin to form online music wholesaler Digital Access.

Based in Moscow, the new company will distribute both local and international product to the likes of on-line stores and mobile phone operators in Russia and neighboring countries, delivering content such as full-track audio downloads, ringtones, ring-back tones, video clips and full color images.

Russia is already the world’s third-largest mobile market with around 125 million handsets in use, and major telecos are now looking to secure value-added services such as music to entice people to sign up to their networks.

“With Digital Access, we look forward to accelerating the digital revolution in Russia and [the Commonwealth of Independent States] with our music partners, providing the wholesale platform of choice for mobile and digital providers,” said Lincoln Benet, CEO of Access Industries.

Company is a privately held, U.S.-based entity which invests in media operations, among other sectors, and was formed in 1986 by Warner Music director Len Blavatnik.

Although Digital Access is launching with two of the major labels, the new venture is hopeful it will include content from other record companies as it progresses. Other labels may be keen to enter into agreements given that the estimated value of recorded music sales via mobile phones in Russia grew by around 25% in 2006 to more than $400 million, exceeding the value of physical product sales, such as CD and cassettes.

Warner Music chairman Patrick Vien said: “This is a strategic investment that we believe will play a pivotal role in unlocking the potential of the dynamic Russian music market. We see this as a transformational initiative that will help digital and mobile partners deliver the highest-quality music experience to their customers.”

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