7digital’s Warner deal for DRM-free tracks confirms it as the UK music startup to beat
March 5 Mike Butcher
7digital has secured the first deal to exclusively sell Warner Music’s full catalogue in the rights-free format across Europe. Customers in the UK, Ireland, France, Germany and Spain can now download tracks from Warner artists in DRM-free MP3, firing a shot across the bow of Apple’s iTunes store, which utterly dominates the music downloads market. 7digital now stocks 3.5m tracks, 80% of which are rights-free. The site already has a deal to sell EMI’s DRM-free music and is also negotiating with Sony BMG and Universal.
The deal confirms Ben Drury, it’s co-founder and MD as one of the smartest brains in the digital music business today. I met him many years ago when he was a raw recruit on Music Week magazine and later when I interviewed him for a podcast a couple of years ago. 7digital now seems pretty unstoppable, thanks to the smart thinking of him and his team. I could only find one picture of Ben online and it’s a crappy mobile phone one - taken by me!
In January, 7digital secured £4.25 million in a round led by Sutton Place Managers that included original investor Balderton Capital (formerly Benchmark Europe). The company started offering DRM free downloads in December and has since seen a 188% increase in sales. 7digital also provides branded digital solutions for clients such as ITV & Channel Five, Pringles, Miller, Last.FM and Bebo.
Comments
March 5th, 2008 at 11:36 am
You must be kidding…..Where is the 7 digital itunes ? Where is the 7 digital; ipod, iphone, mac book, etc ?
Does it matter that the songs dont have drm ?
The songs I buy from itunes dont have drm…..I can burn them to a cd and do with them what I please.
The DRM issues in this instance is an illusion…..just as the 188% increase is..Whats the real number in sales revenue ? How do this compare to itunes or other online sites that sell drm or drm free music…..
Correct me if I m wrong….but I think that 7 Digital has also received funding from one of the major record companies…..Is this a good thing ?
Why should we cheer for the labels to fight back against Apple ? Because Steve Jobs has found a way to turn the tables on them ? Because they were no so smart and wanted to keep forcing us to buy over priced music so that we could have the one song that we wanted…..
March 5th, 2008 at 11:55 am
7digital have not received funding from any record labels, major or otherwise. 7digital’s backers are Sutton Place and Balderton Capital.
Whilst it’s true that you can burn DRM protected music to CD and rip it back sans-DRM it’s not a great experience, and the quality of the resultant file will suffer.
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March 5th, 2008 at 4:10 pm
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March 5th, 2008 at 6:56 pm
i’m afraid i must agree with william’s comments above, as i believe you’re getting quite worked up over a relatively small matter.
the music download business - at best - provides ~10% margins after marketing, content management and fulfillment expenses. and 7digital is a distant player after itunes.
i’ve had a chat with ben and he’s a wonderful chap. but any smart business person knows that the music business is a terrible business to be in…
March 5th, 2008 at 8:18 pm
There are a number of other sources that people from all across the world can get drm free music. Is exclusive license the best idea any more? When people can’t buy it legally from their favorite store they will just pirate it…
March 5th, 2008 at 10:07 pm
also, i’d wager that the “exclusive” deal with warner is but a temporary one.
selling music downloads is a low-margin, commodity business and 7digital will need to either:
a) seek to own the space entirely (like itunes, which appears to have an insurmountable head start), or
b) differentiate its services in a way that is meaningful to consumers.
sadly, the world doesn’t need 7digital (or itunes either, for that matter). the labels should simply sell music downloads themselves and cut out the middlemen.
March 6th, 2008 at 12:52 am
ben mackenzie - Nice thinking. It’s a shame you relegate 7digital to your ‘boring old fart’ strategy. Perhaps it fits with your persona? But maybe you’re right. As with Stiff record, there may always be a role for a middleman.
March 6th, 2008 at 5:07 am
hi mike, i must say i don’t quite understand your comments, but i suspect we may be misunderstanding each other.
there is definitely a role for a middleman in a&r - for example, discovering new acts, helping with marketing & promotion, etc.
however, there isn’t much of a role (or margin) in the retail music business. i should think there are sufficiently numerous examples of this (hmv, tower records, msn music, yahoo! music, etc.) to make this clear.
that’s why the labels don’t need 7digital, or any other retail music site for that matter.
perhaps you might care to respond to my points, instead of resorting to insults?
March 6th, 2008 at 9:43 am
Surely it’s never going to be a core competency for a music label to be its own retailer? It would seem to be outside their scope, hence the requirement for partners. Well, whatever, I’m sure I’m wrong.