Source - LSE Regulatory
RNS Number : 7247Q
7digital Group PLC
30 June 2022
 

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

30 June 2022

 

7digital Group plc

("7digital" or "the Company")

 

eMusic Live agreement and fundraising

Expanded revenue generating opportunities with music livestream platform

 

7digital (AIM: 7DIG), the global leader in B2B end-to-end digital music solutions, is pleased to announce that it has entered into an agreement (the "Agreement") with eMusic.com, Inc. ("eMusic") regarding the eMusic Live music livestream platform, a joint project of eMusic and the Company, which will expand the Company's revenue-generating opportunities. 

 

The Company also announces that it has entered into an agreement with Tamir Koch, a director of the Company and a significant shareholder, for a 13-month loan of £500k (the "Shareholder Loan"). The monies will be used by the Company for working capital purposes.

 

eMusic Live

 

The Company and eMusic launched the eMusic Live platform, which had been developed and primarily funded by eMusic, in 2020 as a platform for the live music industry to stage virtual concerts and create unique artist-to-fan experiences.

 

Since launch, eMusic Live's livestream platform has achieved a number of key milestones. The platform has grown to 1.5m unique monthly visitors, and has hosted world-renowned music superstars, festivals and events. Notably, eMusic Live has established relationships and exclusive livestreams with the world's biggest music and live entertainment companies including AEG presents, iHeart Media, and Goldenvoice, cementing its position as the platform of choice to support world-class artists and festivals. The eMusic Live platform is purpose-built to prioritise the artist and maximise fan engagement and commercialisation, and is the only platform that offers livestream and non-fungible token ("NFT") bundling, allowing fans to buy a ticket, virtual merchandise and music in one purchase across all currencies.

 

To date, 7digital has realised revenue through providing the digital music tracks for download in the eMusic Live experience. Under the terms of the Agreement, 7digital will now satisfy the production costs of live events on the eMusic Live platform as well as provide other support such as marketing, and will receive 50% of net revenue derived from all activity on the platform, including sponsorships, video on demand, ticketing and merchandise sales. The Agreement specifies flexibility that reserves the Company's right to not participate in funding or revenue share for any particular event. As a result, the Agreement is expected to broaden 7digital's revenue streams. In addition, the Board believes that, looking further ahead, there will be additional revenue opportunities generated by eMusic Live, such as regarding selling rights to broadcasts and other streaming platforms.

 

Fundraising

 

The Company has entered into an agreement with Tamir Koch, a director of the Company and a significant shareholder, for a 13-month loan of up to £500k. The funds drawn attract interest, to be rolled up and payable on the date of repayment of the loan, at 6% above the Bank of England's base rate from time to time. The loan is unsecured.

 

Related Party Transactions

 

Tamir Koch is Non-executive Chairman of the Company and, via Shmuel Koch Holdings, is interested in 446,512,126 ordinary shares representing 16.4% of the Company's issued share capital, and is a director of eMusic. Accordingly, the Shareholder Loan and the Agreement are each a related party transaction pursuant to Rule 13 of the AIM Rules for Companies.

 

The independent directors (being the 7digital directors excluding Tamir Koch), having consulted with Strand Hanson as the Company's nominated adviser, consider the terms of the Shareholder Loan and the Agreement to be fair and reasonable insofar as the shareholders are concerned.

 

Paul Langworthy, CEO of 7digital, said: "We are delighted to have extended our partnership and have greater control and involvement in eMusic Live. This joint project has matured over the past 12 months and has positioned itself as the only livestreaming platform to focus solely on musical events combined with artist monetisation opportunities. This agreement will help us to expand our reach in the music industry, diversify our revenues into new verticals and enables us to offer a broader and more comprehensive suite of services to the music industry, our clients and artists."

 

Tamir Koch, Chairman of 7digital and President of eMusic, added: "My firm belief is that now is a window of opportunity to grow a business specifically for the music industry and suited for how consumers are now engaging with music. Over the past two years, the music industry has been going through a transformation, and the emergence of new digital platforms and formats and technology has aided this. It is not just about ticket sales that you see in traditional streaming platforms. Our advanced technology platform allows the artists to distribute, promote and monetise their music beyond this with direct-to-fan opportunities such as merchandise and NFTs. With the deepening of this relationship, it moves eMusic Live towards becoming the leading provider of artist monetisation services globally."

 

 

For further information please contact: 

 

7digital Group plc


Paul Langworthy

c/o +44 (0)20 7618 9100



Strand Hanson Limited (Nominated and Financial Adviser)


Richard Johnson, James Harris, James Bellman

+44 (0)20 7409 3494



Arden Partners plc (Broker)


Ruari McGirr

 +44 (0)20 7614 5900



Luther Pendragon (Financial PR)


Harry Chathli, Claire Norbury

+44 (0)20 7618 9100


7digitalIR@luther.co.uk

 

 

About 7digital

7digital is the global leader in B2B end-to-end digital music solutions, providing a scalable cloud-based platform that enables companies and brands to connect to its global music catalogue and rights management system to launch and manage unique and engaging music experiences. Operating worldwide in over 80 markets and integrated with more than 300,000 labels and publishers, 7digital's platform automates the complex and time-consuming processes of music management, making it easier to access and use music in streaming services, social media, home fitness, gaming, retail and more. With best-in-class infrastructure, deep industry expertise and intelligence tools, 7digital empowers their clients to innovate, grow and serve tomorrow's music consumer. For more information, visit http://www.7digital.com/.

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