Spotify Launch in the U.S. Still Delayed by Record Labels' Financial Demands
Spotify, the popular European music startup that gives you free access to millions of songs, may never launch in the U.S. after all, according to a report in the Daily Telegraph. Apparently, the record labels are asking for “very large minimum guarantees,” which is something that, according to this report, is making Spotify rather nervous as its European operation is just about to be profitable and entering the U.S. market could turn out to be a huge financial risk. According to the Telegraph’s source in the record industry, this “has caused Spotify to stop and think about whether it can afford the move to the US and indeed whether it is worth it.”
The record labels are apparently scared off by Spotify’s freemium model and don’t want potential record buyers to think that music should always be free. Indeed, the industry has worked hard over the last few years (in between suing those who downloaded illegal MP3s) to wean people off the idea that all music should be available for free.
Officially, of course, Spotify still argues that its working hard to launch in the U.S. and looking for additional funding to finance this venture, but if the Telegraph’s source is right, then there is considerable doubt whether this launch will ever happen or whether Spotify will just remain an European company and cede the U.S. market to the likes of Rdio (itself founded by Europeans), MOG and similar startups.
(via: The Next Web)