Spotify is finally to launch in the US later today, after nearly a two-year delay.
The popular Swedish music streaming serviceis to make its debut in the US today, having signed deals with all four of the major recordlabels: Sony Music, Universal, Warner and EMI.
Last week Spotify began inviting Americans to submit their email address so they could be notified when the service was available to sign up to.
The announcement said:“Spotify is coming to the US. The award-winning music service that’s taken Europe by storm will soon be landing on US shores. Millions of tracks ready to play instantly, on your computer and your phone.”
Since 2009, Daniel Ek, Spotify’s co-founder and chief executive, hasbeen repeatedly promising to launch Spotify in the US, but lengthy negotiations with record labels have meant a long wait for users across the pond.
The US product is understood to be very similar to the European product – with a free advertising supported service and two-tiered paid-for product allowing advert-free streams and with the most expensive subscription, mobile access to the service’s large catalogue.
The free service is expected to be limited to just six months and was believed to be one of the main sticking points in negotiations with record labels as executives felt uncomfortable about giving away music for free with only advertising revenues to fall back on.
However, Mark Mulligan, Forrester’s outgoing research director, is not convinced by streaming services’ sustainability. Writing on his blog he says: “Streaming services as a whole justaren’t delivering enough income for artists. Spotify is much maligned for the raw deal it is perceived to give artists, yet when you look at the average-pay-per stream, Spotifyactually pays out more than that darling of premium services Rhapsody, despite the majority of Spotify’s streams being advertising-supported rather than premium (something feels brokenthere).
“The simple fact is thatthe disparity between paid downloads and streaming is unsustainable. It just isn’t tenable that 3 paid downloads from Amazon can still deliver 50% more revenue thanall the streaming services combined over the same period and yethave less than 1% the activity level of those services.”
The Telegraph learned that the service failed to launch in the US last year, because the majorrecord labels demanded “extremely high cash advances”.
It is not clear if these demands were met, butcash flow is not a problem for the company following a recent $100m (£61m) funding round that values Spotify at $1bn.
Last week Spotify announced a partnershipwith Virgin Media which will see the music service integrated with Virgin Media’s TiVo set-top boxes and made available to mobilecustomers.
The partnership, first revealed in the Telegraph last October, is the latest in a series of tie-ups that have enabled Spotify to growits customer base. It is rumoured that the company is close to announcing a partnership with Facebook, to be unveiledlater this summer.
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