Rupert Murdoch's Music Choice Europe yesterday announced it had raised £50m through a share placing which will value the business at almost £200m.

The company broadcasts audio services over digital television platforms, including Sky Digital in Britain and Stream in Italy, and is aiming to further develop online and mobile phone services.

The placing reduces the stake of BSkyB, Mr Murdoch's pay-TV business, from 48.9% to 38.4% of Music Choice.

The other large shareholders include music publishers Time Warner and Sony and mobile phone maker Motorola. Some £20m of the proceeds has been earmarked for marketing over the next four years to build the Music Choice brand. A similar amount will be used to develop technologies for interactive TV and webcasting. Simon Bazalgette, Music Choice's chief executive, said the cash would help the business into "potentially lucrative new markets such as broadband and mobile technology".

Music Choice has an existing 47 channels based on genres including dance, jazz, classical and country which are uninterrupted by advertising or DJs.

Around 5m people have access to the radio services in 17 countries.

The firm was founded in 1993; BSkyB bought into it two years ago. The shares were placed at 162p, and trading is scheduled to begin next Wednesday.