As BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) moves to remake itself in the wake of sharply lower cell phone sales, the company has struck a deal to launch a new music service.
7Digital’s deal with BlackBerry
On Thursday 7Digital Group PLC (LON:7DIG) unveiled a deal it had publically mentioned in the past had come to fruition. The company will continue to offer BlackBerry customers its music service until August 2015, according to a report in the Guardian.
The nearly $1.6 million (US) deal provides 7digital the ability to talk all profits generated from sales off from BlackBerry users.
“We are pleased to have agreed new terms with BlackBerry to provide its users with access to music,” Simon Cole, chief executive of 7digital, was quoted as saying. “This arrangement ensures both the continuation of our relationship with BlackBerry and our ability to sell music to its users.”
The deal with 7Digital Group PLC (LON:7DIG) is seen as a major win for the struggling stock of the digital music company.
Two months ago 7digital’s stock price took a nosedive shortly after its initial public offering in London after Blackberry revealed it was closing the music and video app offerings on its cell phone platform, called BlackBerry World. In the wake of nearly a 50 percent drop in its stock price, BlackBerry would later announce it had a licensing deal with Amazon, giving users access to those applications.
7digital’s stock plunged on BlackBerry’s previous announcement
Initially listing June 10 on the AIM market following a reverse takeover by multimedia content company UBC, 7digital’s stock was a roller coaster, according to the report. The music firm started trading near 29 pence, inched higher to 33 pence. Then the crash. After the July 1 announcement that BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) was changing its service, 7digital’s share price plunged to 13.3 pence in London.
7Digital Group PLC (LON:7DIG)’s management then released news it was in negotiations with BlackBerry, which didn’t help the stock price much at all. In June the company also announced it inked a deal with mobile company ROK Global, a mobile technology applications and services company headquartered in the United Kingdom. ROK specializes in providing secure mobile phones to British intelligence, its web site notes.
This came on the heels of today’s announcement, which confirmed that 7digital did in fact close their deal with BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB). The stock ended just above $16 in London today.