Warner Music has forged a partnership with Egypt’s Orascom, the leading mobile phone group in the Middle East, that it believes will allow the companies to profitably sell music to wireless customers in a region that has been wracked by piracy.
Under the deal, Warner will supply its catalogue of songs, ring-tones, ring-backs and other music content to about 60m Orascom subscribers in markets including Algeria, Pakistan, Bangladesh and Italy.
The agreement is another indication of the increasing ties between mobile phone carriers and the music industry. The carriers are eager to offer new content, such as music videos and games, to offset declining revenues from their traditional voice business. At the same time, music companies, suffering an erosion in physical sales, are trying to open new digital markets.
Edgar Bronfman, chief executive of Warner, said: “I think in 2007 and 2008 you’re going to see the beginning of a real mobile business.”
Under Mr Bronfman, Warner pulled back from emerging markets that were either too small, or too ravaged by piracy to offer profitable opportunities. Yet Warner believes that mobile carriers can succeed as music vendors in many of those markets because their networks are private, and therefore much less prone to piracy.
Naguib Sawiris, Orascom’s chairman, hailed the agreement. “It’s a step forward in terms of making the market legal,” Mr Sawiris said. “It’s a win-win.”