Despite Deal With Sony, Spotify Unlikely to Launch in U.S. Anytime Soon

Swedish streaming music service has to strike deals with three other major labels

January 21, 2011 8:55 AM ET
Spotify founders Daniel Ek and Martin Lorentzon
Spotify founders Daniel Ek and Martin Lorentzon

Spotify, the free streaming-radio service that has generated 10 million European listeners over the past two years, may be one step closer to a U.S. launch now that the Swedish company has signed a deal with Sony Music — but that still doesn't mean a deal is imminent.

Spotify reps did not return interview requests, and Sony reps wouldn't comment, but a source familiar with the deal suggests there's still a long way to go. "This is a step in the process for [Spotify]," the source tells Rolling Stone. "It's not my expectation that there's going to be some kind of super-compressed launch window now." 

Spotify's founder, Daniel Ek, has promised such a launch for months. But to make it happen, the company almost certainly needs to strike content deals with the remaining three major record labels — Universal, Warner and EMI. Reps for those labels wouldn't comment, but almost a year ago, Warner's chief executive, Edgar Bronfman Jr., declared his company would not support this type of business model: "Free streaming services are clearly not net positive for the industry and as far as Warner Music is concerned will not be licensed."

A major-label source suggests Spotify, even in Europe, has yet to prove it can upgrade enough users to the roughly $16-a-month "premium" fee to make a deal worthwhile. "I can tell you there is not a big rush to do a Spotify deal," says the source. "I guarantee if they do [launch], it probably won't be with much of the music in the U.S."

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