Net Element Signs Distribution Agreement with Deezer to Expand Music1's Digital Music Content Moneti

Net Element Signs Distribution Agreement with Deezer to Expand Music1's Digital Music Content Monetization Strategy beyond Russia

Music1.ru, Powered by Net Element's Proprietary Digital Music Discovery Engine, Signs Agreement with Deezer to Distribute Its Content to 180 Countries

MOSCOW & MIAMI--(BUSINESS WIRE)-- Net Element International (Nasdaq: NETE) , a technology-driven group specializing in electronic commerce and mobile payment processing through its collaboration with Igor Krutoy, one of the most distinguished and widely popular Russian composers, entertainment icon, record label owner and hit TV show producer, today announced their signing of direct distribution agreement with Deezer, which will expand the adoption of Music1's digital music rights management strategy and enable digital music content-management companies and content producers to monetize their assets through Net Element's proprietary digital music discovery engine.

Created through collaboration between Net Element and Mr. Krutoy's record company, "ARS Records", the online and mobile monetization platform will expand Music1.ru's current library of more than 2,000 hours of music videos and concert footage including both popular Russian and international titles. The Music1.ru endeavor is expected to become the leading Russian-based destination and monetization platform for Russian-originated digital music content management companies and content producers that are actively seeking distribution beyond Russia.

"I'm excited that we are showing such rapid progress in our Music1.ru venture with Net Element, as this new digital music platform along with its distribution network will have a tremendous positive impact on the industry," said Mr. Krutoy. "Deezer is one of obvious leaders in reaching global audiences, and I'm proud that we have signed a direct distribution deal with this company. Fans will now have access to the music they love and our digital content monetization platform will provide an opportunity for Russian music performers to derive income beyond the confines of concert halls. Clearly, we are on a trajectory to shape and lead the evolution of the music and entertainment industries in Russia."

The Music1.ru platform is not just a website - it is an online and mobile destination for users to discover music in new ways through its proprietary recommendation engine that matches visual cues with music playlists and users' preferences. Music1 will first concentrate its efforts on facilitating proper digital distribution of content via Deezer, but it also has a broader outlook. Music1 plans to have digital music content available everywhere users demand it - as well as regions with a growing passion for Russian music content. Deezer has a mature mobile distribution infrastructure in place through Deutsche Telekom (T-Mobile), Belgacom, Orange, Tigo and Telenor. Music1's aggressive strategy is to become the single platform that allows Russian music content to be monetized via digital distribution, while reaching global audiences on popular user platforms where they are already comfortable consuming content.

Said Dmitry Kozko, Net Element's president: "With Music1's music discovery engine, playlist-building technologies and dynamic video player, music fans will get a truly personalized experience. Music1 represents what Net Element is all about - using smart technological innovations to redefine online experiences." He adds: "Music1.ru is just the start and we are poised to leverage its technologies, platforms and relationships to really show music rights holders in the countries of the Commonwealth of Independent States (CIS) that it is possible to make money from digital music distribution worldwide."

Music1.ru also will serve as the digital content platform featuring popular music events in Russia, including the "Pesnya Goda" festival and "New Wave" international contest for emerging pop artists.

During its beta phase, Music1.ru provided an online platform that enables the popular "New Wave" competition for the first time to receive applications and select contestants online via Net Element's proprietary technologies. Music1.ru beta tested this submission process for NewWave 2012 and successfully gathered submissions from participants, while attracting more than 20,000 votes during the six-day event. Music1 plans to broaden its relationship with the NewWave competition for 2013 by releasing new online destinations for the contest.

"Music1.ru was a vital part of the success of New Wave 2012 by broadening our reach and providing contestants and fans with an easy, interactive way to enter the contest and vote for their favorite bands online," said Alexander Rumancev, New Wave's general director. "Based on our success already with Music1.ru during its beta phase, we look forward to expanding our footprint this year and accepting submissions through Music1.ru."

Music1.ru incorporates Launchpad and Music Brain, two of the innovative technologies developed by Net Element, a company that owns and operates several online destinations and has patents pending for music recommendation engines and playlist-building technologies. Launchpad is a proprietary content management system that helps facilitate contests and has been used by top brands like Nokia as well as universities and festivals worldwide. Music Brain is a unique artificial intelligence and recommendation engine that helps determine user preferences and tailor user experiences.

About Net Element International (Nasdaq: NETE)

Net Element International (NASDAQ: NETE) is a global technology-driven group specializing in electronic commerce and mobile payments. The company owns and operates a mobile payments company, TOT Money, as well as several popular content monetization verticals. Together with its subsidiaries, Net Element International enables ecommerce and content-management companies to monetize their assets in ecommerce and mobile commerce environments. Its global development centers and high-level business relationships in the United States, Russia and Commonwealth of Independent States strategically position the company for continued growth. The company has U.S. headquarters in Miami and international headquarters in Moscow. More information is available at www.netelement.com.

About Deezer

Deezer delivers an exciting, broad and truly global music experience to more than 26 million music fans across 180 territories. With 3 million paying subscribers, more than 1,6 million Facebook fans and more than 100 million shareable playlists, Deezer allows fans to enjoy music unconstrained by any of the barriers of the past, providing access to a catalogue of more than 20 million tracks, instantly available on any device - smartphone, laptop, tablet, home speakers, car, or work PC. Deezer's mantra is music discovery, helping fans rediscover the joy of finding and sharing fantastic new music through specially selected editorial recommendations for every single market in which it is present. With an international partnership with Facebook and strategic telecoms partnerships with Belgacom, Orange, Everything Everywhere and Telenor, amongst many others, Deezer is committed to bringing music to new audiences worldwide.

Editor's Notes: Interviews may be coordinated upon request.

Net Element International
Dan Bruck, 305-507-8808
dbruck@netelement.com
www.netelement.com

KEYWORDS: Europe Russia

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