Dixons, the electricals retailer, yesterday moved to cash in on the growing demand for pop tunes from the likes of Justin Timberlake, Beyoncé and Eminem doubling up as mobile phone ring tones by signing a three-year agreement with Monstermob.
The mobile phone content provider has entered a profit sharing agreement with Dixons that will see Monstermob packs available in all Dixons' outlets by April. These packs give customers free samples of Monstermob games, ring tones, wallpapers and videos for mobiles with the offer of cheap subscription rates if they sign up to receive the latest products every month. However, those wanting soft porn images downloaded on to their phone will have to go direct to Monstermob. Dixons, which yesterday bought a stake in Monstermob and signed an exclusive sales agreement with the group, will not be selling its more controversial products.
Profits that arise from subscriptions, as well as one-off downloads and sales through a jointly run website, will be shared equally between the two.
Martin Higginson, managing director of Monstermob, said: "We know Dixons has great success with distributing Freeserve through its stores, and this is a strong endorsement in Monstermob from them. We can use their leverage - they understand how to maximise this deal." Mr Higginson believes a substantial number of Dixons customers will become subscribers.
Monstermob revealed yesterday that it had more than quadrupled profits in 2003, mainly through an increase in subscriptions. The company, in its first full-year results since it listed on London's junior AIM exchange last November, said pre-tax profits rose to £1.5m from £313,000 last year.
Mr Higginson said it had 120,000 subscribers at the end of 2003, compared to less than 20,000 the previous year. This was a 60 per cent increase on its own expectations, and helped to boost turnover by 76 per cent to £13.9m. Dixons has paid £500,000 for a 1.28 per cent stake in Monstermob and has been given a further option to buy a further 7.72 per cent stake at 165p a share.
The shares yesterday closed at 185p, making the company worth £44m.
Dixons owned Freeserve, the internet provider, until 2000 and has recently moved to capitalise on the broadband revolution with another distribution deal. AOL internet package are now being sold in its stores.
Monstermob has been selling its services through Dixon's mobile phone outlet, The Link, since October. Tthis will be expanded to Dixon's 300-strong electrical stores.Reuse content