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For over 18 months, Spotify has hyped the coming of a U.S. service. It now appears that one of Europe's most important digital entertainment companies has a toehold in the United States.
Spotify could put some pressure on the other labels and offer hot acts if signs licensing deal with Universal Music Group, home of Lady Gaga.
(Credit:Greg Sandoval/CNET)
Music industry sources have confirmed Spotify has struck a licensing agreement with Sony Music Entertainment, the second largest of the four top record companies and the home of such acts as Alicia Keys, the Foo Fighters and John Mayer. The terms of the deal weren't available.
I reported in October that Spotify, which offers ad-supported music free in addition to paid subscriptions, had moved closer to finalizing licensing deals and last week the New York Post reported that Sony and Spotify had all but signed a contract. That's wrapped up now. The main question is still unanswered: When will Spotify U.S. finally launch?
At this point, a Spotify service featuring songs from all four labels appears to be a ways off. If Spotify is willing to risk going out with just two labels, then we might see it sooner. It's risky because many users will be disappointed if they can't find the songs they want on Spotify. Remember SpiralFrog? That was one of the problems that plagued the ad-supported music service that debuted with songs from two labels and was blasted by users for offering a library with gaping holes. The company flamed out almost two years ago.
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 30.8 percent, Sony Music 27.4, Warner Music Group 19.8, indie labels 11.6 and EMI 9.6, 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."
The Midem conference, a huge gathering of the music-industry in Cannes, France, is scheduled to begin. I expect Spotify's troops to make a full-court press there on the labels it still needs.
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Spotify could put some pressure on the other labels and offer hot acts if signs licensing deal with Universal Music Group, home of Lady Gaga. (Credit:Greg Sandoval/CNET)
Music industry sources have confirmed Spotify has struck a licensing agreement with Sony Music Entertainment, the second largest of the four top record companies and the home of such acts as Alicia Keys, the Foo Fighters and John Mayer. The terms of the deal weren't available.
I reported in October that Spotify, which offers ad-supported music free in addition to paid subscriptions, had moved closer to finalizing licensing deals and last week the New York Post reported that Sony and Spotify had all but signed a contract. That's wrapped up now. The main question is still unanswered: When will Spotify U.S. finally launch?
At this point, a Spotify service featuring songs from all four labels appears to be a ways off. If Spotify is willing to risk going out with just two labels, then we might see it sooner. It's risky because many users will be disappointed if they can't find the songs they want on Spotify. Remember SpiralFrog? That was one of the problems that plagued the ad-supported music service that debuted with songs from two labels and was blasted by users for offering a library with gaping holes. The company flamed out almost two years ago.
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 30.8 percent, Sony Music 27.4, Warner Music Group 19.8, indie labels 11.6 and EMI 9.6, 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."
The Midem conference, a huge gathering of the music-industry in Cannes, France, is scheduled to begin. I expect Spotify's troops to make a full-court press there on the labels it still needs.
Business Forum | Christian Forum | Coupon Forum | Discussion Forum | Gamers Forum
Legal Forum | Politics Forum | Sports Forum | Teen Forum | Webmaster Forum