The British music streaming service, We7, reduced its losses to about £3m last year as the Peter Gabriel-founded company managed to triple its annual turnover.
We7 recorded a loss of £2.97m in the year to December 2010, according to the company’s latest Companies House filing, an improvement on the £3.66m loss reported in 2009. The Milton Keynes-based music firm reported a turnover of £965,374 last year, up from £361,081 in the previous year.
Steve Purdham, the We7 director, said in the report that 2010 was the “first major milestone” in proving a viable business model for streaming music online.
We7 shifted its focus from allowing free music streaming to a personalised radio player, as rival Spotify stepped up its free and premium offering to music lovers.
“To date, digital music services have been investment-led companies with the key to long-term sustainability being the evolution of an economic model that can add up,” said Purdham. “For most companies in this market this has proved to be an elusive goal. However, with increasing focus on the economics, the model for We7 has become clearer and continues to be the basis of our increasing confidence and belief that the opportunity that can be attained provides the foundation for a significant high value proposition.”
We7 secured £3.6m in funding in May this year from investors, including Qualcomm (NSDQ: QCOM) Ventures and Pentech Ventures, with a further £2.1m to be paid in the final quarter of this year. It also won a government grant worth £1.8m for this year and 2012.
This article originally appeared in MediaGuardian.