Spotify Signs More Deals, Still Waiting on Warner
posted Saturday Mar 5, 2011 by Nicholas DiMeo
It seems like every week I have Spotify updates for everyone. Starting in January, I mentioned Spotify would make its way from Europe to the US very soon. So far, the streaming music company has finalized a deal with Sony and EMI and has even hinted at arriving the the US sooner than we think. The only problem holding them back was the ability to land a significant deal with another big record label, which would force analysts to consider Spotify as a serious competitor. That is, until now.
Want to know who Spotify scooped up this week? Hit the break.
Sources say that Spotify is just a couple of weeks away from landing a deal with Universal Music Group, the biggest record label around. Analysts have now valued the European streaming company at $1 billion but still have their doubts until the company can also get Warner Music on board with their gameplan. Other "informed" skeptics are doubting they could even get the deal with Universal signed.
Execs in both Universal and Warner have pouted about Spotify's possibility of ruining the market that Apple, Rhapsody and other companies have established by creating more competition, but as we've talked about before, it really will only help the labels and artists both by exposing the music to a brand new user base over here in the States.
If the record labels finally get over themselves and the fake issues they've created that I mentioned last time Spotify still has to try to convert its free users to paid subscribers. According to them, they have 10 million users with 750,000 paying fees. Analysts are saying they will have to convert at least 15 to 18 percent in order to attain a profitable business model. Some are even concerned about the phantom Google and Apple cloud music streaming service that we've been hearing about.
It doesn't make sense to give away so much music up front with Spotify if we don't quite know what Google and Apple's plans are yet since Spotify would have to compete with these guys after they launch.
People are just afraid of change and the fact that this hybrid service would put the other companies to shame. Spotify is still aiming for a summer launch and has just acquired another $100 million in funding this week. I hope we see this launch to the masses here in the US very soon.
