PLDT signs distribution deal with Universal Music

Philippine Long Distance Telephone Co. (PLDT) and the world’s biggest music publisher, Universal Music Group International, have sealed an exclusive “game-changing” deal that will allow PLDT’s mobile units Smart, Talk ‘N Text and Sun to distribute music content, officials announced Monday.

PLDT said the partnership opened up new business opportunities with a large and influential player in the global music industry. Through Smart Music, more than 70 million subscribers will have access to more than three million tracks under the Universal Music, via unit MCA Music Inc.,  which includes songs by popular artists Rihanna, Jay-Z and the Beatles.

For Universal Music, the deal makes sense as it allows the company to expand its business in the Philippines, which has nearly 100-percent mobile penetration rate, while cutting losses to piracy by offering an affordable and convenient alternative.

In line with this, Smart Music has pegged the rate at P15 to P20 a song, below rates of comparable online stores like iTunes of Apple Inc., which charges more than P40 a song. Moreover, Smart Music downloads can be charged against prepaid or postpaid billing, removing the need for a credit card, in the process enlarging its potential market.

Sandy Monteiro, president of Universal Music Group International in Southeast Asia, said the time was right given the maturity of the country’s telecommunications market, the level of smartphone penetration and PLDT’s rollout of high-speed Internet services.

He said the contract with PLDT was good for three years.

“The decision to give exclusive mobile rights of our assets to one telecommunications company is a giant step. In fact, this is the first time we have done anything like this in the world,” he said in a joint press briefing with PLDT officials.

“Smart Music is just the beginning of what will become a multi-front development of the PLDT’s multimedia strategy. In the coming months, you will see us grow our multimedia content offerings,” said Charles Lim, Smart’s head of consumer wireless business.

Both companies are looking at growth in the digital music market, which accounts for about half of industry revenues globally. For the Philippines alone, digital music accounts for 40 percent of the P700-million domestic music business.

Monteiro also noted that the deal extended beyond music distribution. He said Smart would handle promo tours with Universal Music’s artists as well as mobile merchandising rights.

“When any artist comes to the Philippines they will work, by choice, with Smart. Meet and greets only through Smart. Artist live-chats, fly-aways to Singapore and London, only through Smart,” he said.

It is because of these value-added aspects that Monteiro said he believed consumers could shift to legal music download platforms.

“We want to change the structure of the music market in the Philippines,” he said.