Tesco buys UK music site We7 for £10.8m

Tesco has purchased We7, a British digital music service, which attempted to rival Spotify, for £10.8m.

The service attempted to go head-to-head with Spotify in 2009 as streaming began to take off. However, it lost that battle as Spotify’s star continued to rise – launching around the world - while We7 was forced to end its costly free on-demand streaming offering. Instead, the site co-founded by Steve Purdham and the former Genesis frontman Peter Gabriel, has focused on providing personalised radio stations to its users in an attempt to differentiate itself in an increasingly competitive marketplace. 

It is understood that Tesco, which currently has a 91 per cent stake in the company but will purchase the remaining nine per cent within the next few weeks, plans to launch additional digital music services on the We7 platform in the coming months. 

Source and more details on Telegraph UK

Evolution of Retailers and Retail Services?

In the past I have written about blurring lines between Retail Services and other vertical services such as Financial Services. As conventional retailers come under more and more pressure from shrinking economic climate they are bound to explore this trend. This will see they expanding into not just multi-channel but genuine growth of their portfolio into other verticals. Latest indication of this happening is the news that leading UK retailer M&S launching their banking services. M&S Bank will open more than 50 branches over the next two years, with the first debuting next month at Marks & Spencer's flagship Marble Arch store. The Bank will offer a current account by autumn.

The fashion and food retailer will target customers with a new current account in the autumn in an attempt to make banking more convenient for its shoppers and encourage them to spend more on M&S products. The bank will be run in collaboration with HSBC, which has owned M&S Money since 2004 and takes a 50 per cent share of profits. M&S, which has 3m customers across a range of credit cards, loans, savings and insurance products, would not reveal whether it planned to charge for current accounts but said it would reward customer loyalty. Talking to the FT, Colin Kersley, chief executive of M&S Bank said, “There won’t be much point banking here if [people] don’t shop here.”

Will other retailers follow in M&S footsteps? Probably they will await the outcome of this experiment before embarking on their own similar adventures, I think.