HMV is to acquire a 50% stake in 7digital for £7.7 million.

Entertainment retailer HMV has announced it is to acquire a 50% stake in online music store 7digital, which will now power its digital entertainment and book stores.

In the deal announced today (3 September), HMV will invest £7.7 million into 7digital for the 50% equity stake of the firm as well as access to the digital media company’s MP3 catalogue of over six million tracks.

7digital will now power HMV music and video download stores in the UK and Canada and will also provide an e-books store for Waterstone’s.

Simon Fox, Chief Executive of HMV Group, said: “This is an exciting new step for HMV which transforms our position in the fast-growing digital market.

“We believe 7digital is the best partner to help us accelerate our growth in digital entertainment and to become a major player in the market for legally downloaded entertainment.”

With an increasing number of illegal music and film downloads, HMV’s move reflects the retail industry’s attempt to recoup some of the revenue lost by providing a legal download alternative.

HMV’s investment is the latest in a string of partnerships for 7digital. The online music store currently provides download services for Spotify, Last.fm and will soon launch a mobile application for Blackberry phones.

Ben Drury, CEO of 7digital, commented: “The widespread adoption of the MP3 format has raised the profile of legal downloading amongst consumers and the market is continuing to grow.

“We already provide a number of high profile clients with successful download services and are confident we will see similar success with this venture.”