The future of music distribution and access is finally making some headway in its quest to infiltrate America. According to recent reports, popular European subscription music service Spotify could finally be coming to America.
The U.S. has been eagerly anticipating a stateside launch for quite some time, though negotiations with record labels have repeatedly stalled out of concerns for profit margins. Major music labels in America aren’t fond of the freemium model, which allows for unlimited music consumption for a base fee. Spotify users can even opt for free accounts with advertising, or choose to pay $10 a month for no ads (and further musical mobility). The labels are requiring high cash advances to cover what they perceive to be lost revenue (after decades of pillaging consumers’ finances with inflated costs), and Spotify reportedly balked at fronting the money.
According to the New York Post, “two music-industry sources” report that Spotify is very close to signing a deal with Sony Music and has also linked up with another unnamed label.
A Spotify spokesman told The Post, "Negotiations are progressing well, but [we have] nothing to confirm at this stage."
Meanwhile, while Spotify’s model is ideal for music consumers who have simply had enough of exploitation, inflated prices and playback-meddling from major labels (remember DRM?), the service has yet to turn a solid profit; it lost $26.7 million in 2009.
The comprehensive design and outreach of Spotify represents a direct threat to limited services like MOG, Rhapsody and Rdio, which require a user to pay a monthly fee for on-demand content that can be limited in variety.
Early last December when Spotify CEO Daneil Ek described the label negotiations: "[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," according to an interview with PC World.
Spotify’s rooted in the success and failures of past music services. Napster’s Sean Parker sits on the board of Spotify, which operates in the UK, France, Spain, the Netherlands, Norway, Sweden and Finland. The service has piqued the interest of both Apple and Google, which have held talks with Spotify about partnerships.