Spotify closes U.S. streaming deal with Sony Music

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Digital streaming music service Spotify has signed a U.S. distribution agreement with Sony Music Entertainment, heralding a significant breakthrough in the startup's attempts to extend its platform to the North American market. Citing a source with knowledge of the negotiations, The New York Times reports the Spotify/Sony Music partnership is a done deal, although financial terms are unknown--also uncertain is the state of Spotify's ongoing talks with Sony's major label rivals EMI Music, Warner Music Group and Universal Music Group, effectively guaranteeing the digital service will not launch in the U.S. anytime in the imminent future. Conventional wisdom says that Spotify must secure at least three of the four major label catalogs to gain significant traction among American consumers.

Spotify's music streaming service now boasts over 10 million registered users across Europe--insiders say major American record labels are pressuring 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 the vast majority of Spotify users in Western Europe tune in to a 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.

Earlier this month, mobile music discovery solutions provider Shazam agreed to integrate the Spotify service, offering iOS and Android device users in Europe direct access to full-track versions of songs they've tagged and identified. The Shazam solution pinpoints music from any source, regardless of ambient noise--Shazam will include the new Play in Spotify feature in both its free and premium applications, enabling users to identify new music, hear the song in their entirety and add that track to their digital catalog.

For more:
- read this New York Times article

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