Yes Marks The Spotify
The New York Post is reporting that European music provider Spotify is “days away from signing a deal with Sony Music,” and has gained support from another major U.S. music company as well making a 2010 launch imminent. Spotify offers users a free account with advertising to listen to unlimited music or a $10/month option without advertising.
U.S. labels have not warmed to the service despite its having gained a solid reputation in Europe. The U.S. music leaders don’t like the word “Free” attached to music and apparently demanded extremely high upfront payments in the past. Has this changed?
Spotify first planned to launch in the U.S. in 2009, but was unable to get the necessary deals ratified to do so. Then 2010 was the “sure thing” launch date, and that has also passed.
A Spotify spokesperson told the Post, “”Negotiations are progressing well, but [we have] nothing to confirm at this stage.” Reportedly, both Apple and Google have also had talks with Spotify.
Spotify’s software interface contributes to what makes it unique. Users can create playlists and share tracks with friends, put Spotify on mobile phones and use a sophisticated search function making it easy to create lists of many kinds. Premium Spotify users can also listen to music when they are offline. The site includes many artist biographies plus artist radio stations which help consumers discover new music. Of course it also connects with Facebook.
Analysis: Album sales continued to slide in 2010 dropping another 12.7% which may well be a force for bringing the parties back to the table. The record labels have yet to find a sales model to stem the annual losses which have become commonplace for the last ten years. The Spotify model has been criticized, not for lacking cool features, but because the conversion rate from free to paid has been lower than hoped for, rasing questions about the service’s ability to survive long term. How it will fare in the U.S if/when it debuts is yet to be seen.
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Please finish the story and talk about the projected royalty rates projected with this streaming service. Seems like the Intellectual property owners (songwriters and publishers) might be big losers in the first launch years of these services. Any follow up on when a more viable rate will be set would help round out this headline.
You are right. The point is that we don’t yet know what the revenue steams to copyright owners will look like, the deals haven’t been announced.