A8.com, an online and wireless digital music service established in 2000 in China, plans to go public in Hongkong Exchange(0800.HK) to raise as much as HK$ 217 million. In 2004 and 2005, IDGVC, TDF, Intel Capital and JAFCO invested in two round of financing in A8.com.

According to its prospectus, A8 mainly sells digital music content in form of ringtones, ringback tones(RBTs), and IVR musics to mobile phone subscribers through China Mobile and China Unicom. The music content of A8 comes from two sources: licensed from international and local music labels, and user-generated original music uploaded by artists to a8.com. Till now, over 10,000 artists have contributed over 50,000 original music content and songs to a8.com. In 2007, there were about 19,664 music uploads from users. The artists can share 15 - 50% net revenues derived from their original music.

In 2007, A8 recorded revenue of RMB 286 million yuan and net profit of RMB 55 million yuan. About 86.3% of its revenue in 2007 came from China Mobile, and about 13.4% from China Unicom. Actually, music-related revenue accounts for about 69% of A8’s gross revenue, the rest are from non music-related services as mobile games and wallpaper downloads.

Obviously, A8.com is another wireless value added service providers(WVAS) in China, similar to Nasdaq listing companies Linktone, Hurray and Kongzhong, just with UGC digital music concept. Since last year, all China’s WVAS have been suffering difficult time in business, mainly due to the change of regulation policies by China wireless operators, Tom Group even decided to take Tom Online private in 2007 for poor performance. Facing tight regulation policies, A8 still recorded a 6.5% increase in revenue and a 41% growth in net profit in 2007. The financial results and digital music concept might help A8 to get enough share subscription and go public successfully under current market circumstance.