The financial situation of we7 is getting worse just as the product side of the company is turning around. We7 is free and premium streaming music service in the UK that is in competition with the likes of Spotify.
In 2009 the company lost £3.66 million, a sharp rise from the company’s recorded loss of £2.61 million in 2008. However, there may be light at the end of the tunnel for the company. Revenue followed the loss in growing, hitting some £361,081 in 2009, against £46,382 in 2008.
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The bad news is that cost of “sales and administ[ration]” rose one million pounds over the same time. In short, to make another 324,699 quid, the company spent more than triple that to pay for the revenue’s costs.
While the financial side of the company does indeed look bleak, the product itself is growing like mad. Users of we7 listened to 1,753% more music in 2009 than 2008, and total visits to the site rose a massive 2,233%. If it is possible for we7 to control its costs and somehow align expenses to revenues, they may have a shot.
No matter how many users flock to the site, if we7 has to spend a pound to get 32 pence, they will go out of business.
Be sure and check out our previous We7 coverage.