Spotify closes in on U.S. launch with Universal Music agreement
Spotify appears close to finally extending its digital streaming music to U.S. shores after signing a distribution agreement with Universal Music Group. The Wall Street Journal reports that Spotify and UMG completed the deal Thursday, adding that Spotify is also in advanced discussions with Warner Music Group. Spotify previously signed distribution pacts with major labels EMI Group and Sony Music Entertainment.
If Spotify is able to partner with three of the major U.S. labels, the service is likely to be available in the U.S.
Spotify executives have told their label partners they plan to launch U.S. services in early July. The company has announced and missed several previous U.S. start dates, but conventional wisdom has long stated that Spotify needed to secure content from at least three of the four major label catalogs in order to gain significant traction among American consumers. A Spotify spokesperson declined to comment on its plans.
The Spotify service now boasts over 10 million registered users across Europe. Insiders say major American record labels have consistently pressured the firm to jettison its current free content approach in favor of a guaranteed revenue model, citing the impasse as the culprit behind Spotify's absence from the U.S. market. While about 85 percent of Spotify users in Western Europe tune in to the free, ad-supported version of the service, reports indicate that the major labels want Spotify to follow the lead of rivals like Rhapsody and eMusic by introducing premium monthly subscriptions to U.S. consumers, enabling the music industry to share in resulting revenues.
The premium Spotify service costs U.K. subscribers £9.99 per month (about $16 U.S.) and offers desktop and mobile access to unlimited, ad-free music. In April, Spotify instituted narrower limits on the amount of music available to users opting for the free version, a move to migrate consumers to the premium offering. The Wall Street Journal adds the step was also critical to convincing label partners to license their music for U.S. consumption.
- read this Wall Street Journal article
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