Tesco and digital steaming service WE7 are set to walk down the aisle, with the supermarket snapping up a 91% stake for £10.8m. Now you know why Tesco ditched its value range this year!
WE7 was co-founded by Yoda-esque prog wizard Peter Gabriel with current CEO Steve Purdham and John Taysom in 2007 and operates as a personalised radio station, allowing users to choose from a library of 11m tracks for free. The site generates revenue from advertising in a similar model to Spotify and other streaming services, with premium ad-free versions also available. At the end of last year, WE7 reinvented itself from an on-demand service to functioning as a Pandora style ‘digital DJ’.
Digital Director of Tesco Mark George said: "This move will help us offer a greater choice for the growing number of customers who want to access music instantly on any device. We7 has a great team and a good technology platform from which we can launch a range of digital music services in the future."
The retailer seems to be setting out to establish an online digital entertainment empire, with the purchase of movie streaming service Blinkbox last year, though it remains unclear if We7 will continue largely as a stand-alone service.
WE7 CEO Steve Purdham added: "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".
The supermarket giant is expected to buy the remainder of the company in the coming weeks, no doubt allowing Gabriel to fund several world music projects or orchestral stadium tours. Every little helps!