Waiting for Spotify in the US? It May Be Very Different

Free music got a few knocks this week.  Warner is getting upset with ad-supported services like Spotify and Pandora because they are not positive enough revenue generators for the music industry.  Their problem with these services, is that first of all the amount of money that advertising brings in much less money than a subscription or paid model would.  And, although customers are paying for these sites by having to sift through advertising to get to the music, the implication is that the music is free, and therefore, devoid of value.  Never mind that millions of kids under the age of 25 have never paid for music, and are appalled by the very thought of it, and yet it may be the most important thing in their lives.  Now, says Wired,  although Warner will not cancel its license with Spotify in Europe, the music lovers who have been eagerly awaiting the site’s presence in the US may get a very different deal when it finally shows up.

“To Spotify, its licensed free music competes with the unlicensed free music on file sharing networks. But to Warner, it apparently represents lost sales. It’s highly unlikely that Spotify would launch in the states without Warner on-board, because nobody wants to use a music service with that big a hole in its catalog.

This leaves precisely two ways forward: either Bronfman backs down, or Spotify launches in the U.S. with a more restrictive free version.

Our money is on the latter — not only because Spotify CEO Daniek Ek said months ago that the U.S. version of Spotify could differ from the European one, but also because Warner likes music subscriptions, and Spotify sells one.”

For Spotify, this puts them in the awkward position of trying to please both the labels and the users, groups that are historically at odds. As we know, the music business is trying desperately to hold onto its old media model, even as it tries out new forms of distribution. And just as ad supported models are coming to the starting to do well, that’s not quite good enough.



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