We7 relaunch pins hopes on web radio

By Ian Youngs
Entertainment reporter, BBC News

Image caption,
The relaunch will also make it cheaper to run We7

Digital music service We7 has switched tactics in its battle with Spotify, putting personalised internet radio at its heart in a relaunch.

We7 has let fans play specific songs and albums on demand, but will now focus on providing radio-style webcasts tailored to each user's tastes.

The company says it currently has three million users per month in the UK.

But fewer than 10,000 of those are paying subscribers, compared with Spotify's 500,000 across Europe.

The new Internet Radio Plus feature will be similar to those offered by Last.fm and the US streaming service Pandora.

We7 chief executive Steve Purdham said the company introduced a radio feature "without any fanfare" in January, and by October it accounted for "well over half" of the songs played through the site.

"The on demand function will still be there," he said. "We're not taking anything away - we're just changing the emphasis because the consumer has said: 'This is the way I prefer to listen to my music.'

"Fifty-one million people in the UK listen to radio and that's how most music is consumed in the mass market."

The relaunch will also ease the financial burden on the company.

The royalties paid per song on radio-style services are roughly one-third of those paid when a user chooses to stream to a specific song on demand, We7 said.

The difference in royalty rates was "a big factor" in the switch, Mr Purdham admitted, adding: "Making the economics of digital music work is quite a challenge."

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