LONDON (Alliance News) - 7digital Group PLC Thursday said it has reached a new agreement with BlackBerry Ltd to provide its users with access to music, following the Canadian handset maker's decision to close the music and video sections of its store, Blackberry World, last month.
In a statement last month, the digital music and radio services company said it does not expect Blackberry's decision to shut down the music and video sections on the BlackBerry World app store to hold back its financial performance for the year.
The company has a contract with Canadian handset maker BlackBerry. However in June BlackBerry made the decision to close the music and video sections of BlackBerry World and replace it with the Amazon Apps Store, after partnering with Amazon to make 240,000 Android apps available to its users.
In a statement Thursday, 7digital said it has now agreed new terms with BlackBerry for the continuing provision of music services on BlackBerry devices.
It said Blackberry will pay 7digital fees totalling GBP705,000 in the current financial year and GBP315,000 in the next financial year up to the end of the existing contract in August 2015.
"7digital will also take over the sales of music from BlackBerry, now retaining all profit margin earned on track sales which had previously been shared with Blackberry," it said.
7digtal said the new arrangements with BlackBerry will not result in any changes to the group's current market expectations.
In July, 7digital saw its shares plummet, despite saying that it didn't expect BlackBerry's decision to hit its full-year results.
7digital said Thursday that is has now also expanded its contract with its existing customer, Guvera, an online music streaming service. The Guvera streaming music service is currently powered by 7digital in United Arab Emirates, Saudi Arabia and India. The company said Guvera will provide its service in an additional eight emerging market territories.
"As the new territories are added, 7digital's monthly recurring revenues will increase," it said.
7digital shares were up 1.5% at 16.00 pence Thursday morning.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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