Supermarket giant Tesco has confirmed today that it has purchased the British music streaming service We7 for £10.8 million (approx. $16.76 million).
Co-founded in 2009 by Steve Purdham and former Genesis frontman Peter Gabriel, We7 was designed to go head-to-head with Spotify in the music streaming market just as the whole concept was beginning to take off. Needless to say the service was nowhere near as successful, and it remained available to users in the U.K. and Ireland only, while Spotify went global.
Tesco reportedly acquired a 91% stake in We7 initially, though there are plans to purchase the remaining 9% within the next few weeks.
Purdham believes Tesco’s customer base is exactly what We7 needs to be a success:
“We are very excited by the prospect of teaming up with Tesco. With its loyal customer base, numerous marketing channels and international reach, we believe Tesco is the perfect partner to bring We7’s music services to a wider audience. Tesco has been an innovator in entertainment retailing for many years and we look forward to continuing this innovation digitally.”
In recent years, We7 has become more of a personalized radio service in an attempt to differentiate itself from other music streaming services. While Tesco does have plans to introduce additional features, Purdham feels the existing “radio model” is better than the subscription one employed by the likes of Spotify or Rdio:
“I think there is room for lots of digital music streaming services and we still haven’t seen one of the biggest players, Apple, fully wade into this space…but we feel there is more commercial gain to follow the radio model with ‘on air’ adverts rather than subscription services and free on demand streaming.”
Tesco’s We7 purchase follows its acquisition of Blinkbox, a movie and TV show steaming service, last year.
Do you think Tesco has what it takes to make We7 a success?
[via The Telegraph]