Tesco has bought a 91 per cent stake in the music streaming service We7, paying out £10.8m for the business.
Founded in 2007 as a download site, We7 went down the Spotify-style streaming route in 2008, before dropping its "on-demand" content in 2011 and becoming a "DJ" service, drawing on users' likes and dislikes to craft bespoke playlists.
Tesco's acquisition of the service supports the supermarket giant's ongoing push into digital, which saw it buy video on demand site blinkbox and social marketing company BzzAgent within the last year.
Tesco states that is investment in its online business will reach £150m by the end of 2013.
Tesco digital director Mark George said of the acquisition:
"Customers and technology together are transforming the way we listen to music. Tesco is already one of the UK's largest retailers of CDs; this move will help us offer a greater choice for the growing number of customers who want to access music instantly on any device, whenever and wherever they want.
"We7 has a great team and a good technology platform from which we can launch a range of digital music services in the future," added George.
We7 CEO Steve Purdham said, "We believe Tesco is the perfect partner to bring We7's music services to a wider audience. Tesco has been an innovator in entertainment retailing for many years and we look forward to continuing this innovation digitally."
The acquisition comes hot on the heels of Sainsbury's purchase of 64 per cent of loss-making e-book firm Anobii earlier this week, for the bargain sum of £1.