Spotify goes live in the U.S. after clinching Warner Music deal


Spotify's digital music platform is finally live in the U.S., ending more than a year of speculation over when the popular European service would finally expand to American shores. The Los Angeles Times reports that Spotify's U.S. launch follows just days after the company inked a licensing agreement with Warner Music Group; Spotify previously signed deals with the three other major labels (Universal Music Group, EMI Group and Sony Music Entertainment).

Spotify offers on-demand streaming access to more than 15 million songs--users can create and manage their own playlists, share tracks via Facebook, Twitter, email and SMS and wirelessly sync their playlists to their mobile phone or iPod. The U.S. version offers three flavors: Spotify Free (on-demand, buffer-free access with occasional advertising); Spotify Unlimited (uninterrupted, ad-free access via computer for $4.99 per month); and Spotify Premium (online and offline access across the desktop and mobile for $9.99 per month). Motorola Mobility will serve as Spotify's exclusive mobile device and tablet launch partner.

Spotify touts more than 10 million registered users across seven European countries. More than 1.6 million users are paying subscribers. Although Spotify's free service is widely considered its most disruptive element, insiders say its U.S. launch was delayed by music industry fretting over its business model, with labels reportedly pressuring Spotify to jettison its free approach in favor of a guaranteed revenue stream. In April, Spotify instituted narrower limits on the amount of music available to users opting for the free version, a move designed 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.

"No music on-demand service has broken through a million paying users yet," said Informa Telecoms & Media principal analyst Giles Cottle in a statement. "In fact, Informa estimates that there were only 2.5 million paying music subscribers in the U.S. in 2010, including paying users of Pandora (customized radio) and eMusic (MP3 bundles), both very different offerings to Spotify. So despite the competition, there is a definite gap in the market for Spotify and an opportunity for it to grow said market. If all it manages to do is poach a few users from its competitors, the launch must be deemed a failure."

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