Music Diary Notes: Spotify Launch Next Week? Also, No Warner Music Deal (?) and Launch Notes Leaked!

Music Diary Notes: Spotify Launch Next Week? Also, No Warner Music Deal (?) and Launch Notes Leaked!

I have written about Spotify’s plans to launch soon, including a sign-up page. However, there were even more interesting developments this week!

First, as indicated in the title it seems that Spotify is looking for a launch between the 11th and 18th of July, if we believe a report from the Wall Street Journal:

Spotify AB has told record label executives that it is aiming to launch its music-streaming service in the U.S. as early as the middle of next week, according to people familiar with the matter.

Next, in spite of the imminent launch, it appears that the deal with Warner Music Group definitely is not in place:

Warner Music executives flatly declined any comment, though a number of other sources have told Digital Music News that WMG is clearly a hold-up. “There’s definitely not a deal yet,” one source relayed, at least at the time this article was published. Sources to the LA Times echoed that information, though at least one Spotify executive made comments suggesting something was close.

How much does that matter? Well, while in third place behind Sony and Universal, Warner still controls 20% of the annual sales volume for North American music according to Digital Music News. The four major labels control nearly 90% of all music, so having all of them in place is critical.

And finally, it appears that Spotify has gained deals based on some rather ambitious thinking regarding how well they will do in North America. The image at top is a leaked document showing WHY they are ensuring success.

While much of what they say is true – they have the only fully integrated solution according to their own parameters, there is massive pent-up demand (at least for the free service), and there are hundreds of thousands of email addresses waiting for an account (I know I have FIVE of them) … it is the last one, saying that they expect 50 MILLION ‘American Spotify Users’ by the end of the first year that seems like a bit of a leap!

This basically assumes they will get ~33% of all Facebook users in the U.S. to at least create a Spotify account. Hmmm … I don’t see it. We have four accounts in my house and a single streaming account will work just fine for us. Nor do I see my parents doing it … or many of my friends who are too cheap to even buy music let alone pay for a subscription.

I also question the first item – again, MOG, Rdio and Slacker Plus all have free trials, social integration, on demand, radio, MP3 retail, and on and on. Not as far-reaching as what Spotify offers … but will it be enough to suddenly change the numbers game by an order of magnitude or more?

But again, I am also assuming they are talking ‘free’ users, and then selling things based on a 10% conversion rate similar to Europe. I have two ways to describe that thought process … delusional or stupid.

Sound harsh? Check this latest fact: more people are searching LimeWire than Spotify – and this just as the hype machine for Spotify has reached fever pitch!

Either way, I don’t see them entering 2012 with even 1 million paying accounts. MOG and Rdio and Slacker Plus are all just too good, Spotify has been ‘gimped’ too much, and people just haven’t shown a willingness to pay $10 for this thing in large numbers as of yet.

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About the Author

Michael Anderson
I have loved technology for as long as I can remember - and have been a computer gamer since the PDP-10! Mobile Technology has played a major role in my life - I have used an electronic companion since the HP95LX more than 20 years ago, and have been a 'Laptop First' person since my Compaq LTE Lite 3/20 and Powerbook 170 back in 1991! As an avid gamer and gadget-junkie I was constantly asked for my opinions on new technology, which led to writing small blurbs ... and eventually becoming a reviewer many years ago. My family is my biggest priority in life, and they alternate between loving and tolerating my gaming and gadget hobbies ... but ultimately benefits from the addition of technology to our lives!