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So, Tesco buys Peter Gabriel's WE7 music service for $16.7 million

British Supermarket behemoth Tesco has snapped up WE7, a streaming music service co-founded by Peter Gabriel that offers personalized radio stations to users, for £10.8 million ($16.7 million). The UK's biggest supermarket has purchased 91 percent of the company, with the remaining stake set to be transferred over shortly. It looks like the chain will use WE7's infrastructure and resources as the spine for a beefier music service as British supermarkets look to diversify into the entertainment market following its purchase of Blinkbox last year.

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Tesco buys digital music platform

Tesco has bought WE7, a leading digital music platform, which will offer customers a wider choice in how they consume music and complement Tesco's current music offer in store and online.

The move follows the acquisition last year of blinkbox - recently voted the UK's best online movie service by Channel 5's The Gadget Show - and is the latest step in Tesco's strategy to offer customers new and innovative ways of accessing digital entertainment.

WE7 is a leading free-to-listen, personalised internet radio service where customers can listen to the music they love and discover new music that they might like, based on their previous selections. With an extensive library of 11 million tracks, WE7 offers the latest releases, well-known classics and a comprehensive catalogue of all music genres.

The service is available at www.WE7.com on PC and Mac and via apps on iPhone, iPad and Android smart phones and tablets. Tesco plans to launch additional digital music services from the WE7 platform in the coming months.

Mark George, Digital Director at Tesco, said "Customers and technology together are transforming the way we listen to music. Tesco is already one of the UK's largest retailers of CDs; this move will help us offer a greater choice for the growing number of customers who want to access music instantly on any device, whenever and wherever they want. WE7 has a great team and a good technology platform from which we can launch a range of digital music services in the future."

Steve Purdham, CEO of WE7 said "We are very excited by the prospect of teaming up with Tesco. With its loyal customer base, numerous marketing channels and international reach, we believe Tesco is the perfect partner to bring WE7's music services to a wider audience. Tesco has been an innovator in entertainment retailing for many years and we look forward to continuing this innovation digitally."

Tesco has bought a 91% stake in WE7 and will purchase the remaining shares within a period of weeks. The purchase price was £10.8 million.