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December 10, 2010 • Editorials, Events, Music Diary

Music Diary Notes: Spotify Gives Up US Launch for 2010 … Will Anyone Care When it DOES Arrive?

In case you haven’t heard of it, Spotify is a free-or-paid subscription music service that works differently than something like Slacker or Pandora in a few ways. First off, you can immediately stream whatever song you want from their massive library of publisher material. Next, the service integrates with your existing music to form an extended library available for immediate listening online even when you’re away from your home PC.

But one of the biggest things about the service is the social aspect – sharing playlists of stuff you love with others is a form of music discovery that has taken Europe by storm. And if you are a paying member, you can take all of this on the road using the mobile app. It is a great service with about 10 million subscribers in Europe, fewer than 10% of whom actually pay a fee.

Spotify has been rumored to be coming to the US since the summer of 2009 (and China and other places it still hasn’t launched). In fact, one rumor was caught by Jason Reese whereby the Google Nexus One would have launched with Spotify included!

Recently, Spotify has stated that they ‘can’t commit’ to a launch in 2010 … and given that we are in the second week of December, only a Christmas Miracle (cue Better Off Dead references) could make it happen at this point. Here is a section of an article at MacWorld:

Spotify garnered worldwide attention because of the unprecedented rights and control the music service gives users for little or no cost. Most of Spotify’s users pay nothing for the service, but can play any music they want—on demand—in exchange for viewing some ads. Only about 750,000, or about 7.5 percent, of Spotify customers actually pay for the service. Still that’s up from the 320,000 who were paying at the time of SXSW last spring.

In Europe, Spotify customers can choose to pay about $13 per month for unlimited access to the Spotify library of more than 10 million tracks.

Spotify is now trying to sell a music subscription service, in which users can sample music for free but must pay a $10-a-month fee for the right to download it. Several other music services are using the same model, including MOG and Rhapsody.

But Spotify got a much better royalties deal from the labels in Europe, and can’t get the same terms in the U.S. market, which accounts for about half of worldwide music sales. So what’s the problem? What’s preventing a deal from being struck? In a word, fear.

Ek has a more delicate way of saying it: “We are in a really interesting time right now. They [the labels] are still trying to get their heads around the space. They are seeing what we are seeing, with mobile and social. They want to make sure that if this is going to move on to be the next thing they want make sure they are setting the right precedents with free models, ad models, subscription models.”

So we continue to see that the music industry is squeezing customers and businesses alike … while article after article shows how the piracy rates in Europe (particularly in former ‘worst-in-world’ Sweden) have dropped since Spotify does even better than simply downloading music, it helps you find music you will like!

However, while Spotify has been stuck at the same place for nearly two years, other services have launched such as Rdio. Rdio launched in August and offers many of the same features of Spotify even if it isn’t as fully featured or robust at this point.

The question I have – who cares if Spotify EVER comes to the US anymore? Have you checked out Rdio? Have you seen the new and revamped eMusic? Have you checked out all of what Slacker and Pandora are doing to keep some amount of mindshare?

My point is that while Spotify has been negotiating positions with the industry, everyone else has been pushing out new features and trying to differentiate themselves – as a recent article said, there is no truly dominant player in the streaming music space, but if Spotify doesn’t hurry it will be left in the wake of others seeking to make the space their own!

What services do you use for streaming music? Do you pay or just use the free version?

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