B2B tech provider 7Digital has signed up to become the official digital music partner of UK supermarket chain Sainsbury’s.
The UK supermarket stopped selling physical CDs online last year but runs a download store for music, books and films.
7Digital brings a 32 million-strong catalogue to Sainsbury’s, which could potentially allow it to launch a branded streaming service in the future.
The news comes as 7Digital announces its audited preliminary results for the year ended 31 December 2014 – a 12-month period which saw the reverse acquisition of the company completed with UBC Media.
(The below results therefore include a combination of UBC and 7Digital’s – which merged last summer – financials from June 10, 2014).
Overall revenues decreased 12% to £10.2 million from £11.5 million in FY2013, while comprehensive profit improved to £0.3 million from a loss of £4.5 million a year before.
This was largely due to gains from its stake in audio social network Audioboom, which it sold in 2014. This raised £3.5m for 7Digital against an initial investment of £1.6m.
Operating loss was flat at £4.5 million
The company said it scored 25 contracts with new businesses in the year, worth £3.4m, including ROK Mobile, Spanish Broadcasting System Inc and Guvera – for whom 7Digital is now believed to be partnering in the UK and across Europe.
Interestingly, B2B income from downloads declined to claim just 22% of 7Digital’s business, compared to 79% a year before.
Adjusted LBITDA was reduced by 21% to £3.1m (2013: £3.9m), ahead of expectations. Cash balance at the year-end £ 5.31m (2013: £1.29m)
Simon Cole, Chief Executive, said: “These results represent a year in which we successfully created a new company from the merger of UBC Media and 7digital; we have ended it in a position ahead of the predictions we had made during the merger. Our success and growing customer base is proof of the developing market for streamed music services and the coming together of the radio and music industries as technology and consumer habits change. As our business model has changed, our high margin monthly recurring revenues and profitability continue to grow, powered by the fast growth of our existing clients and new customers wins.
“As the opportunities continue to grow in all of our key market sectors, the Board is confident that 7digital is well positioned to take advantage of what will be a significant demand for new streamed music and radio services globally.”Music Business Worldwide
