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
News
people
News
A survey carried out by Sainsbury's Finance found 20% of new university students have never washed their own clothes, while 14% cannot even boil an egg
science...and the results are not as pointless as that sounds
Sport
Sean Abbott
cricketSean Abbott is named Australia's young cricketer of the year
News
i100
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

Ashdown Group: Client Services Manager - Relationship Management - London

£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Guru Careers: In-House / Internal Recruiter

£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Day In a Page

Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

Auschwitz liberation 70th anniversary

Woman sent to three Nazi death camps describes surviving gas chamber
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea