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SCMP Reporter

Stock market listing candidate A8 Digital Music Holdings plans to strengthen its user-generated music content library by increasing the company's distribution network.
Chairman Alvin Liu said  the expanded network would allow more internet and mobile-phone users to pay for music content.
The company  aims to raise as much as HK$216 million through an  initial public offering later this month.  SBI E2-Capital Asia is the sponsor for the deal. Trading is scheduled to start  on June 12.
A8 Digital's  music products are delivered through China Mobile and China Unicom, which get  15 per cent to 30 per cent of the content revenue.
Founded in 2000, A8 Digital is one of the leading mobile music service providers on the mainland.
Instead of offering music downloads of commercial pop singers, the company provides user-originated music content for download or free-of-charge listening on the Web.
To encourage users to choose the A8 service, the company has partnered with several mobile-phone vendors to embed specific software in new mobile phones. The new A8Box enables mobile-phone users to directly log into the A8 music library for free listening, and download the ringtones on the same user interface.
According to its prospectus, A8 Digital  generated 285 million yuan (HK$318.43) in revenue last year,  up 6.3 per cent from 2006.  Net profit climbed 41 per cent to 55 million yuan.
The company now claims to be the mainland's biggest music library for independent music composers, with more than 50,000 songs from 10,000 artists.
It has created several  hit songs in the past few years through its online platform. These include I Don't Cry and I Don't Want To Let You Cry - two  hits that contributed 18.8 million yuan in revenue last year and which accounted for 6.5 per cent of the company's total sales.
Mr Liu said the company usually took three months to test the popularity of songs written by independent composers, measuring the hit rate or the amount of free listening on the website. Once those songs successfully reached their target audience, the firm negotiated with the composers for further collaboration.
'A new song needs six to nine months to generate revenue for the company,' Mr Liu said. 'Every month over 1,200 songs are submitted to us. We allow free listening of those songs on our website and see which songs are a potential hit.'
A8 Digital will also promote songs  by launching various products such as ring tones, ring-back tones and other music download services for mobile-phone users.
'Once the songs we choose become popular, we will talk to the composers about whether we could buy out the copyright or adopt a revenue-sharing model with them,' Mr Liu said.
Tuned in
The expanded network will allow more users to pay for music content
A8 Digital Music plans to launch an initial public offering later this month to raise as much as, in HK$216m



Listing candidate A8 Digital Music set to expand distribution network