7digital provides white-label platform services and solutions that enable businesses to provide end-to-end digital music services to their customers. Its platform provides the infrastructure that supports high resolution audio download and streaming services, together with the rights to more than 50 million music tracks and curation expertise to enable businesses to offer comprehensive digital music services to their clients. As well as providing these B2B services, 7digital runs its own online music shop and provides music radio programming for broadcasters including the BBC. Its global customer base comprises leading consumer brands, mobile carriers, broadcasters, equipment manufacturers and retailers including Panasonic, Onkyo, Cdiscount, musical.ly and Electric Jukebox. The company was founded in 2004, listed on AIM in 2015 following the merger with radio group UBC and now employs c 125 FTEs through its offices in London, San Francisco, Manchester, Lille, Paris and Auckland.
In this interview CEO Simon Cole presents the 2016 results highlights, notably the move to EBITDA profitability in Q416 and strong growth in high margin licensing revenues in H216. It is this momentum, on a largely fixed cost base that underpins his confidence that 7digital will move to profitability across 2017as a whole. Cole outlines the rationale behind the proposed acquisition of its largest European competitor 24-7, which along-side scale and synergy brings a significant customer and strategic investor to 7digital via 24-7’s parent company, MediaMarktSaturn. The digital music market has changed considerably over the last few years but remains ripe for disruption as a significant share of the market is still not served by the flat fee consumer subscription services. Cole explains why 7digital is well placed to share in the next phase of the industry’s growth. With a leading position in a dynamic market and a management team experienced at integrating acquisitions he sees a significant opportunity for investors in 7digital.