Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

The 800lb Gorilla: Spotify US Launch Is Just Days Away

Posted by Tom Foremski - June 14, 2011

[I'm in London this week following keynoting a conference for Omnicom's European senior leadership teams. The following news was from a panel I moderated on Tuesday.]

Spotify, the most successful music streaming service, has signed the remaining deals it needs with record labels to finalize its US launch, which is now expected in the first week of July.

"We're signing the remaining deals as I speak," said Jonathan Forster, General Manager of Europe & Global Vice President of Ad Sales at Spotify, speaking at an Omnicom conference in London.

"We won't launch before July 5th," Mr Forster told SVW. He said that Spotify has worked hard to make sure the music companies are happy with the US launch. That has meant agreeing to a faster monetization strategy than it would like.

Spotify operates as a freemium service with ads and an ad-free subscription service. It has more than 10 million users and 1 million subscribers that pay ten Euros per month.

Spotify's US headquarters will be in New York. Its entrance into the US market has been expected for more than a year but long negotiations over licensing deals led to delays. Mr Forster said that the music companies wanted to treat the US market in a different way than other markets.

Spotify will be a major challenge to US music streaming companies such as Mog and newcomer startup Rdio, which has been spending a small fortune a month on PR and marketing in a bid to gain as many users as it can before Spotify comes into the US market.

The company is headquartered in London but its roots are in Sweden. It was founded in 2006 by Daniel Ek and Martin Lorentzon.

The music service has won many enthusiastic fans and Spotify has had to spend very little on marketing in most countries because its fans tell others and recruit new listeners.

However, this has not been the case in France, said Mr Forster. "We were puzzled because we knew we had listeners that loved the service but they weren't sharing that with their friends. We did some interviews and it seems that the French are too cool to tell others."


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