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Spotify U.S. Launch Imminent, Raises $100m Round

Friday June 17, 2011 11:53 am PDT by Jordan Golson
Spotify is finally (almost) ready to launch in the U.S., closing deals with three of the four big music labels -- Warner Music, predictably, is the lone holdout -- and a massive funding round, raising $100 million at a $1 billion valuation.

Spotify is a freemium music service, offering both free and paid subscription offerings, similar to Pandora. Spotify lets users listen to whatever songs they wish, in whatever order they wish, rather than building "channels" of like music on Pandora.


Spotify has a significant presence in Europe, with more than 1 million paid subscribers and 6 million ad-supported free users. In the US, it may face a more uphill climb with heavy new competition from from Google, Amazon, and Apple, plus there are existing music services from Rhapsody and the aforementioned Pandora. In fact, Apple has been rumored to have made efforts to prevent Spotify from being able to launch in the U.S.

Spotify plans to charge around $10 per month for its premium service, and allows users to stream millions of songs they don't own.

The company, founded in Sweden but based in London, raised $100 million from Digital Sky Technologies, Accel and Kleiner Perkins, all heavy hitters in the venture game. DST is a major investor in Facebook, which might help the two companies to make a deal. Spotify and Facebook are working on a "significant integration" according to All Things D's Peter Kafka, though that isn't tied to the U.S. launch. Facebook co-founder and CEO Mark Zuckerberg is a known Spotify fan.

Spotify has a decent war-chest, plus proven success and buzz from its European operations. If it can ink a deal with Warner, it might actually, finally, launch on this side of the pond.

[ 138 comments ]


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bgmesh3
104 months ago

Hmmm... $25 for iTunes match, or $10 for Spotify...... For once, I might not go the Apple route.

"Apple has been rumored to have made efforts to prevent Spotify from being able to launch in the U.S."... Wow so Apple's just being Apple. I get it now.


Uh, and by that you mean $25 for iTunes Match, or $120 for Spotify, right? $10 is per month.
Rating: 12 Votes
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arn
104 months ago

Hmmm... $25 for iTunes match, or $10 for Spotify...... For once, I might not go the Apple route.

"Apple has been rumored to have made efforts to prevent Spotify from being able to launch in the U.S."... Wow so Apple's just being Apple. I get it now.


$25/year vs $10/month :)

But they are very different services.

arn
Rating: 10 Votes
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TheJing
104 months ago
I've used Spotify for years now because I'm in Sweden during the summers and it is AMAZING. Give it a try. You won't be disappointed.
Rating: 6 Votes
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bpaluzzi
104 months ago

I'm not a fan of Spotify. I've had a Premium subscription for the last month and still isn't doing it for me.

No gapless playback


What do you mean gapless playback? I've never had any issues with buffering or time between tracks.


Compressed audio only (MP3, OGG, AAC etc... is not real sound, it is a toy)

Give me a break. It's 320kbps. You can't hear a difference.


160kbps streaming only to the iPhone, which sounds dreadful

Again, give me a break.


Can't be streamed around the house

Except to anything with Airplay, or a Sonos. What else are you looking for?


Bad content discovery system (in comparison to say, a good record store)

Are you really saying that an app doesn't compare to a record store? Really? Wow.


Artists don't get paid, simple as.

False.



I'm a sound engineer, and having recorded quite a few artists who have appeared on both iTunes and Spotify, I know the damage Spotify does to their income. Using CD Baby, your music appears on Spotify after it appears on iTunes, and every time, iTunes income drops significantly when listeners switch over to Spotify. The income for musicians from Spotify is insignificant, verging on non-existant.


I'm an artist, and I know that if you have stuff that people actually listen to, you get a decent supplemental income from Spotify. Artists don't make money from recordings these days, regardless of the medium. You used to tour in order to sell more albums. Now you record albums to enable touring.
Rating: 3 Votes
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Heilage
104 months ago
Congrats, now you can partake in the awesome that is Spotify. It's a great music service, I've been happily paying for two years now.

I know that I'm just "renting" music, but it's so convenient to just be able to search for a song and listen to it in good quality immidiately. It's easier than pirating. :)
Rating: 3 Votes
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LoganT
104 months ago

What has this "rumor" to do with Mac? This isn't MediaRumors or AudioRumors. Its MacRumors. Spotify isn't a Mac-Only app. It doesn't even have an iPad version. Apple has nothing to do with the company. So why it on the front page?

Can't understand why this story is still getting free advertisement all over. There are other music services out there.


It competes with iTunes, which is made by Apple.
Rating: 3 Votes
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AAPLaday
104 months ago

Dell competes with Apple, HP competes with Apple. Microsoft competes with Apple. Netflix competes with Apple.

Every digital company competes with Apple now days. I want to hear MacRumors, not rumors from their competitors.


Spotify as an app is available for both the mac and the iOS app store. If you don't want to read the article then you don't have to.
Rating: 3 Votes
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bpaluzzi
104 months ago

What are you on about?! There is a VERY audible gap between tracks. Pretty much every other bit of kit I own to play music on will play gaplessly. Even my 20 year old CD player can play without gaps.


I see what you mean -- taking the gap that was recorded on the album and removing it. If that's important to you, then no, Spotify can't do that.


I really don't know what you're on about. 320kbps OGG is definitely a step back from 44.1k PCM. IMO Spotify is a step back from CD in most ways, except of course it's much quicker to get hold of (for the impatient listener), it's free, and it doesn't take up any physical space.

Seems like you're on bit of a personal mission. It'd be nice if we could keep this conversation mature (famous last words).


I am on a personal mission of sorts. Physics and double-blind tests show that there's absolutely no difference between 160kbps and CD-quality. To be arguing this about 320kbps is absolutely ridiculous.


Well your 'truth' is quite different to my 'truth'. Several of the artists I have worked with have earned significantly less when adding their music to Spotify...


False dichotomy, backed up by false correlation.




Touring really doesn't bring in enough money to earn even a vaguely significant amount of money. Several musicians I have recorded gave up day jobs to go on tour, and have really, really struggled for money since. Unless you're a high-flying touring artists with a large public profile, you'd need to be touring 6 days a week throughout the entire year without a break to even earn minimum wage in the UK.


Yup. Being a musician is hard work. If you think it's tough to make a livable wage touring, try doing it selling CDs.



Lady Ga Ga Earns £108 from Spotify (http://www.independent.co.uk/arts-entertainment/music/news/spotify-1-million-plays-163108-return-1944051.html)



Yeah, except that it's not true. That's been disproven for over a year now. If she was really making what that report says, would she debut her new album exclusively on Spotify?
http://www.spotify.com/se/blog/archives/2011/05/13/lady-gagas-new-album-born-this-way-to-debut-exclusively-on-spotify/
Rating: 2 Votes
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GulGnu
104 months ago

Still no ipad app...and the iphone app sucks cheese balls. After all this time why is the software still so crappy......?


Spotify is my go-to music solution and has been so for some time now. Exactly what about the iOS app "sucks cheese balls". I find that it works very well.

Also, Spotify isn´t just a "streaming service", it also stores music on your device (iOS, Android), so it is fully useable with iPod Touches, and doesn´t hurt your data plan on the go.

Overall, a great service.

/End of puff piece
Rating: 2 Votes
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bpaluzzi
104 months ago

You couldn't be more wrong, but there we go. I could quite easily tell you the difference between 160kbps and PCM audio, but if you want to go on believing that 160kbps OGG Vorbis is great, then go ahead.


Please do. Enlighten all of us. Seriously.



It used to be possible, heck I used to do it. Spotify and online music in general has made it a lot more difficult.

Agreed. But that genie is out of the lamp now. And now, the facts remain that CDs are sold to promote tours (and to increase exposure for sync licensing, but that's a whole other kettle of fish). There's a reason artists are giving away CDs for free, and it's certainly not out of the goodness of their heart.


And yes, of course being a musician is hard work. Being a full-time musician earning money off your own music has in fact become a lot more difficult in recent years, which is why so many more artists have to hold down jobs in education. It's worrying how many music colleges/conservatoires around the world are now training their pupils primarily to become teachers, because that's where the most money is in the music world at the moment...

Most of the state schools are in this position, but they've been that way for a long time. There have always been orders of magnitude more music teaching jobs than music performance jobs. Many of the conservatories don't even have music education as a major -- they're still focused on performance (often to the detriment of students -- many of the conservatories still frown upon instrument doubling, which is absolutely essential for a modern musician)



I don't know why she released her new album exclusively on Spotify, but that's besides the point, and completely irrelevant. Maybe because most people over in the UK now don't bother with iTunes, or buying music in favour of Spotify...


It's tangential to the argument, but I'm just using it as proof that she couldn't have been wronged as much as those initial reports said she was.

Look. We're both passionate about music. We'd probably get along quite well in the real world. Friendly argument at the pub kind of thing. I apologize for maybe setting the wrong tone off the bat. We obviously have different opinions on things, but I (honestly) don't mean any of it personally. My most spirited and chair-throwing arguments are with my best friends :-)
Rating: 2 Votes

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