Tesco have purchased UK digital music site We7 for a reported £10.8million, with the supermarket chain looking to further establish themselves in the entertainment market.
Tesco have bought 91% of the stake in London-based We7, with the company aiming to grab the remaining shares in the coming weeks.
Co-founded by ex-Genesis frontman Peter Gabriel (who looks to pocket £2 million from the deal), We7 has a database of 11million digital tracks and is available on iPad, iPhone and Android devices.
“Initially, it’s business as usual but, given what they’ve got, there’s great opportunities; the real one is access to their wealth of consumers and marketing,” founder Steve Purdham told the Guardian.
“Building a technology startup is always a difficult thing but it’s the persistence there and the ability to create value. It’s just another example of how good UK tech can be. There are good people like Tesco out there that look for innovation and new ways of doing things.”
Mark George, Tesco’s digital director, said: “Customers and technology together are transforming the way we listen to music.
“Tesco is already one of the UK’s largest retailers of CDs; this move will help us offer a greater choice for the growing number of customers who want to access music instantly on any device, whenever and wherever they want. We7 has a great team and a good technology platform from which we can launch a range of digital music services in the future.”
However, We7 has never turned a profit. Though the might of Tesco’s customer reach and marketing department will certainly put We7 into the UK public’s consciousness more prominently, they face stiff competition from streaming services like Spotify and other digital outlets like Apple’s uber-powerful iTunes store.