WMG, Sony BMG mobilize for digital sales in China

Majors invest in wireless venture

Warner Music Group, Sony BMG Music Entertainment, Access Co. and Melodeo Inc. have agreed to work together to develop solutions for delivering mobile music and multimedia entertainment content to wireless customers throughout China and other Asia Pacific markets.

In the deal designed to build a legitimate digital music business in piracy-ridden China, WMG and Sony BMG have made strategic investments in Access China Media Solutions, a joint venture formed by Access Co. and Melodeo Inc.

The agreement is expected to be announced today. Financial terms were not available.

Access China is developing music-based mobile platforms for wireless carriers and handset manufacturers. Given the piracy challenges in China, music and other entertainment companies have long been looking for a secure and economically viable way to distribute content there.

Mobile phone networks are "inherently more secure and have a built-in payment system that is ideal for the sale of high-value, copyrighted digital media," the companies said.

"This investment by Warner Music Group and Sony BMG Music Entertainment is a strong show of faith in bringing together all the key elements to unlock the power of digital-music marketing on mobile platforms," Access China CEO Wayne Zhang said.

"Our participation in this company is an integral part of our overall strategy to innovate and develop the legitimate music marketplace around the world," said Thomas Hesse, president of global digital business at Sony BMG. "This project complements our successful Chinese direct licensing activities for digital music."

Access China is planning to offer various services, including for mobile podcasting and full track downloads.

WMG said it was the first major music company to open a dedicated China office in 2000 and the first to strike a direct, catalogwide content agreement with a Chinese mobile operator last year. The Access China investment is "an important advancement in our long-standing commitment to the dynamic Chinese music business," said Alex Zubillaga, executive vp digital strategy and business development at WMG.