B2B digital-music firm 7digital has written off the remaining debt owed to the company by former client Guvera.
“After careful consideration and extensive negotiation with Guvera, we believe that receipt of further payments is now in doubt and have therefore made a provision against the full outstanding balance of £733,000,” explained 7digital in its latest trading update this morning.
That writeoff contributed to 7digital’s financials in the first half of 2016: its revenues were up 2% year-on-year to £5.2m, but the company recorded a net loss of £3.2m – albeit down from its £6.6m loss in the first half of 2015.
7digital’s licensing revenues actually fell by 3% to just over £3m, but its content sales were up 24% to £1.4m. Downloads revival? Not quite: 7digital won a contract from a major label to sell downloads direct from an artist’s own site – both label and artist went unnamed in the trading update.
The company says that its overall business continues to tilt towards “major, tier one corporates” with the latest example being French e-commerce company Cdiscount, which is launching a music-streaming service next week.
Musical.ly and Will I Am’s Dial represent 7digital’s startups business, while the company also has an intriguing pair of deals with major labels: one to power “a new mobile music service in four markets” and the other to “build a new tool for the label relating to streaming”.
7digital has also picked up the contract to provide high-res downloads for Neil Young’s PonoMusic, which was previously handled by now-closed rival Omnifone.
Streaming is the key growth area that 7digital hopes will see it turn a profit in 2017, however. In 2016 so far, the company has delivered 600m streams to more than 15 million listeners across its business – compared to 72.6m streams to three million people in the whole of 2015.