spotify inks deal with sony, moves closer to us launch

European music streaming service Spotify has finally signed a deal with a major US label, bringing it one step closer to realizing a US launch after failing to achieve it in 2010. Some say the deal with Sony won’t be enough to get the service to us, though.

Steve Knopper says in Rolling Stone:

Spotify reps did not return interview requests, and Sony reps wouldn’t comment, but a source familiar with the deal suggests there’s still a long way to go. “This is a step in the process for [Spotify],” the source tellsRolling Stone. “It’s not my expectation that there’s going to be some kind of super-compressed launch window now.”

Spotify’s founder, Daniel Ek, has promised such a launch for months. But to make it happen, the company almost certainly needs to strike content deals with the remaining three major record labels — Universal, Warner and EMI. Reps for those labels wouldn’t comment, but almost a year ago, Warner’s chief executive, Edgar Bronfman Jr., declared his company would not support this type of business model: “Free streaming services are clearly not net positive for the industry and as far as Warner Music is concerned will not be licensed.”

A major-label source suggests Spotify, even in Europe, has yet to prove it can upgrade enough users to the roughly $16-a-month “premium” fee to make a deal worthwhile. “I can tell you there is not a big rush to do a Spotify deal,” says the source. “I guarantee if they do [launch], it probably won’t be with much of the music in the U.S.”

Greg Sandoval says for CNET:

Regardless of whether Spotify intends to go out with two or four labels, Universal Music Group (UMG) is vital. Not only does UMG, the largest of the major labels, feature some of the best-selling artists, including Lady Gaga and U2, but the company also owns the largest market share. A library combining UMG and Sony would give Spotify the equivalent of about 58 percent of music sales. The breakdown of market share for 2010 is UMG at 30.8 percent, Sony Music with 27.4 percent, Warner Music Group at 19.8 percent, indie labels with 11.6 percent, and EMI at 9.6 percent, according to Nielsen Soundscan.

A Universal Music deal would also apply some pressure on Warner Music and EMI.

For its part, Spotify isn’t commenting about Sony or any of the deals. The company, which has missed at least two prior promised U.S. launch dates, appears to have learned to hush up until all the contracts are signed. Spotify’s spokesman said: “The sensible option is for us to comment when we have a concrete launch date.”

Stay tuned to see what happens next…

About the author

Megatrax Megatrax Production Music is the leading independent music source. Megatrax is dedicated to creating, licensing and delivering the finest quality production and custom music and best customer service in the industry. At Megatrax, our philosophy has always been to stay ahead of technology and to create exceptional quality music. Our commitment to excellence is evident in both the music we produce and the carefully selected catalogs that we represent. Our staff is dedicated to serving you in every way possible and our service team is focused on your specific production requirements. We have a list of products and services that are unmatched in the production music industry and are constantly evolving with your changing needs.

Comments are closed