Summary:

Facing off against Sainsbury’s with a string of digital content vendor acquisitions, Tesco is now buying e-book store maker Mobcast for £4.5 million to translate its success in the aisles to the net.

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In the fascinating emerging digital content battle between some of the UK’s biggest retailers, Tesco is again reaching in to its M&A pocket to tool up.

The supermarket chain is acquiring Mobcast, a vendor of white-label e-book stores, for £4.5 million ($7.1 million) (RNS) to further fuel its own digital book ambitions.

Mobcast was co-founded in 2007 by “Andy McNab”, the pseudonym for a secretive former SAS soldier turned novelist. It powers e-book stores for Orange and T-Mobile (UK) and for SingTel’s Skoob brand, supplied e-books to Nokia’s Ovi store, as well as other clients.

Tesco sold 10.7 percent of the UK’s entertainment this spring, according to Kantar Worldpanel (via The Bookseller). UK supermarkets are facing off to replicate their increasingly strong position retailing physical content in digital media…

Tesco has now acquired Blinkbox to offer online movies and TV, We7 to offer streaming music and Mobcast for books. Sainsbury’s, building its Sainsbury’s Entertainment brand, has acquired social book discoverer aNobii for e-books, Global Media Vault for digital music distribution and contracted Rovi to build an upcoming movie store.

Tesco currently delivers an e-book store based on Adobe’s Digital Editions platform, requiring consumers have Adobe’s software on their desktop or mobile device.

Blinkbox CEO Michael Comish, who co-founded the service and led its sale to Tesco, is now CEO of a unit called Tesco Digital Entertainment. Comish (via release):

“We are already one of the UK’s largest booksellers and Mobcast will help us offer even more choice for the large and growing number of customers who want to buy and enjoy books on their digital devices…”

Tesco is closing its MP3 download store as it begins integrating We7’s streaming music, but, coyly, it will not confirm whether it will permanently ditch MP3 for streams. There is significant enough business left in music downloads that we may yet see Tesco acquire a digital music vendor to reboot, rather than trash, its downloads proposition.

A Mobcast spokesperson tells paidContent: “All current contracts will, of course, continue to be honoured.  Over time, the focus of the business will move to being predominantly focused on developing for Tesco.”

Tesco (#1) Asda (#2) Sainsbury’s (#3)
MP3 Closing - Global Media Vault
Music stream We7 - -
Movie/TV Blinkbox - Rovi
E-books Adobe Digital Editions, Mobcast - aNobii, Global Media Vault

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