Digital

Ad recession made 2009 a tricky year for We7

By | Published on Wednesday 6 October 2010

Music Ally has been having a nosey at the Companies House financial filings of UK-based digital music service We7. The digital music website reports that, although 2009 saw a big growth in profile and user-base for We7, the flat advertising market meant the company made a loss after tax of £3.66 million on a turnover of £361,081. The firm’s backers pumped another £2.6 million into the venture in January and April.

A note in the company report observes: “The market conditions, the collapse of the banking sector and the on-going nervousness of the music industry made the advertising sector particularly susceptible to reductions of budgets and ordering through ‘safe havens’. The net result of that meant that building sales pipelines and closing revenue was a particular challenge during the year… The overall sales delivery was not as strong during 2009 as We7 would have liked”.

But the report concludes that things are looking up, and 2010 saw an early uplift in ad revenues. Of course, the business models, licensing deals and financial performance of most digital music services are shrouded in secrecy, though We7 CEO Steve Purdham has generally been more candid than most, and has openly admitted that making streaming services pay – whether through advertising or subscriptions – is no easy task.



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