HMV buys half of 7digital to drive online expansion

Digitally remastered Beatles back catalogue set for release next week

HMV yesterday moved to expand aggressively in the music and book downloads market, taking a 50 per cent stake in the online store 7digital.

The high-street stalwart announced that it had paid £7.7m for a 50 per cent stake in 7digital, which will power HMV's online music and e-book operations. The deal will combine 7digital's technology and back catalogue with HMV's suppliers and consumer reach.

7digital, set up in 2004 and backed by the venture capital firms Balderton Capital and Sutton Place Managers, also operates online music sales services for labels including Sony and EMI, and streaming sites Spotfy and Last.fm.

HMV's chief executive, Simon Fox, said the move "transforms" HMV's position in the online market. "This will enable us to accelerate growth in digital entertainment. HMV wants to be a serious player in digital," he said.

The contract could see HMV negotiate a full takeover, depending on performance, after 2011.

The groups offer 6 million music tracks online, and the two companies will together overhaul HMV's e-book store. "It is early days in the e-books business, but we're really encouraged by how it has taken off," Mr Fox said.

The group was upbeat yesterday, despite sales falling 1.8 per cent year-on-year during the 18 weeks to 29 August. Mr Fox said: "This is a pleasing start in a tough consumer environment."

The group benefited from adding 29 stores from the collapsed rival Zavvi.

While HMV's like-for-like sales in the UK and Ireland rose 1.7 per cent, the struggling international business fell 12.6 per cent. Sales at its Waterstone's subsidiary fell 3.4 per cent.

Freddie George, an analyst with Seymour Pierce, said the trading statement was "positive, considering the weakness in the games market, which accounts for about 25 per cent of HMV's sales".

The group is set to benefit from the collapse of some of its closest rivals, opening up to 15 temporary stores over the Christmas period. Mr Fox said: "This is the first Christmas without Woolies and Zavvi on the high street. The demand means that the current stores can't deal with all of it."

Mr George said: "HMV and Waterstones are the only credible specialists in their categories following the demise of Zavvi, Fopp and Woolworth, while Borders in books is now down to 56 outlets."

Mr Fox, who again ruled out joining ITV after rumoured overtures earlier in the summer, is relying on a strong pipeline of releases to boost the group in the run-up to the festive period. Jamie Oliver's new cookbook Jamie's America is set for release, as is Dan Brown's new novel, The Lost Symbol. The music world is excited by next week's release of the digitally remastered Beatles back catalogue, in conjunction with a tie-in Rockstar computer game.

Other eagerly anticipated releases include new albums from Pearl Jam, Mika and Alexandra Burke.

Start your day with The Independent, sign up for daily news emails
Voices
Homeless Veterans charity auction: Cook with Angela Hartnett and Neil Borthwick at Merchants Tavern
charity appeal
Sport
Amir Khan is engaged in a broader battle than attempting to win a fight with Floyd Mayweather
boxing Exclusive: Amir Khan reveals plans to travel to Pakistan
Arts and Entertainment
Strictly finalists Simon Webbe, Caroline Flack, Mark Wright and Frankie Bridge
tvLive: Simon Webbe, Caroline Flack, Mark Wright and Frankie Bridge face-off in the final
Sport
Ched Evans in action for Sheffield United in 2012
footballRonnie Moore says 'he's served his time and the boy wants to play football'
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture