We7 transforms from free music streaming to personalised online radio firm

04/10/2011

Ad-supported on-demand music service We7 has transformed into a personalised radio station, as the UK-based free music pioneer struggles to keep pace with rival Spotify. Users will now have to register their details with the site if they want access the 50 on demand tracks a month every free user is eligible to request. We7 users can now type in a song, genre or artist to have a personalised radio experience created for them in a similar vein to Last.fm and Pandora. The company says higher supply costs are a factor: Music Licensing body the PRS charges 0.065p per play for an internet radio service, versus 0.085p per play for an on-demand service.

04/10/2011

3 million users people visit We7 every month, which was founded in 2009 with the backing of musician Peter Gabriel.

The site is still continuing with its two-tier subscription service, which offers advertising-free on demand streaming. And all free users of the site will continue to have their music experience interspersed with adverts.

The company says higher supply costs are a factor: Music Licensing body the PRS charges 0.065p per play for an internet radio service, versus 0.085p per play for an on-demand service.

We7 announced the shift last November, having lost £3.68m in 2009, with revenue of just £361,081.

We7’s revamp has occurred only days after Spotify tethered its service to Facebook, in a bid to crack the US market and grow its two million-strong subscription service.

Steve Purdham, We7’s chief executive, denied that the move was in response to Spotify’s huge success in the on demand streaming space, but admitted the company had “learned a lot in the last two years”.

“We now know that the majority of people want their music picked for them based on the genre or type of artist they like… the new service is similar to Last.fm but is different in the way it is presented. We7 is about creating a music service for the masses.”

Purdham added: “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.”

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