Spotify May or May Not Be Delayed in the U.S.

by mattdentler
August 2, 2010 3:04 AM
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An article published in Billboard last week basically said that Europe's popular music streaming company, Spotify, was back to "square one" for its planned U.S. launch in 2010. Meanwhile, the folks at Wired have come back with more information, claiming that the service is indeed still on track for an American launch by the end of this year. The reason why Spotify's journey across the Atlantic is so newsworthy, is because the service has been a quick hit in Europe. So, everyone (and not just those in the music business) are eager to see how American consumers take to the subscription-based application. While some services - such as Rhapsody - have been modest successes in America, no company has done to the music world what Netflix has done to the film world in this country. More, from the Wired article about the alleged delay:

“The allegations in the article are without any substance,” Spotify head of communications Jim Butcher told Wired.com. “We are in fact in a very good place with our label negotiations which have moved forward significantly, and we’re still on course for launch by the end of the year. Any talk of ‘back to square one’ is completely unfounded speculation and quite simply not true.”

In addition, a source close to the situation said that Spotify has all but signed deals with some of the major labels for its U.S. launch. To be fair, Billboard allows that Spotify might be able to launch here by the end of the year if it is willing to sign short-term contracts with the labels…. So, what’s the hold up? And why no longer-term contracts?

It’s common knowledge within the music industry (and at Google) that Warner Music Group — having been burned by its investment in the free, ad-supported social music site imeem, which folded and was sold to MySpace at an extreme bargain — is extremely reticent to license any more free, ad-supported music services. Billboard’s sources were almost certainly referring to that impasse, which Warner CEO Edgar Bronfman Jr. made public in a statement earlier this year, in their discussions of these negotiations.

In the other corner, Spotify clings fast to its dream of launching a music service in the United States that’s unlike what people here have seen before — and that means offering a free version of the service, to hook them. Once hooked, these freeloaders will have to start paying if they want to access their collection on phones, remove ads, and listen to music at a higher bit rate.

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