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SHOWBIZ> Music
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Hit streaming service Spotify eyes U.S. music fans
(Agencies)
Updated: 2009-11-02 19:00 DENVER – MTV Urge ... Yahoo Music Unlimited ... Virgin Digital ... Since 2003 -- when iTunes launched in the United States -- all of these digital music services have come and gone, without challenging Apple's market dominance, despite the backing of resource-rich parent companies. Add in all the startups that have crashed and burned in the same time period and it starts to look as if no service could ever rival iTunes' traction with customers and critics. Until now. The Sweden-based startup Spotify, launched for public access in October 2008, has momentum like no other digital music service of the last six years. It offers on-demand music streaming, in both free and premium services, and now claims to have more than 6 million users in Sweden, Norway, Finland, the United Kingdom, France and Spain. At one point it reported signing up new members at a rate of 50,000 per day, although that figure has fallen since September, when the service restricted its free version to invited guests in the United Kingdom. Spotify has won high marks from reviewers for the ease with which it provides access to a catalog of more than 6 million tracks from majors and indies alike and the unobtrusive way it delivers advertising. Spotify's recently launched mobile version -- available for the iPhone and Android-powered devices in Europe to premium subscribers who pay the equivalent of around $15 per month -- has won similar praise. Although Spotify doesn't comment on its fund-raising activity, it has reportedly won $50 million worth of backing from investors -- at a valuation of $250 million, an almost unheard-of sum for a music venture in today's stingy venture capital environment. The European service also has the full support of the major labels, which reportedly negotiated a collective 18 percent stake in the company. Yet this momentum will be tested severely as the company prepares to enter the United States -- the No. 1 music market in the world -- with a launch expected either late this year or early next, depending on how fast it completes its negotiations with the majors. "It's been talked about so much I don't think it can meet everyone's expectations," says Forrester Research analyst Sonal Gandhi. "If the Spotify experience can be as good as hyped, it has a lot of potential." |
