Posted 08/25/2009 - 4:46pm by Julia M
The big hype in music these days comes from Europe. Spotify, has over 2 million users in the UK, as well as numerous fans in Sweden and Germany. It’s not yet available in the US, but the thinking is that it will launch in North America in early 2010. European users sing the praises of Spotify’s interface and its catalog of music. Users listen through an application on their computer, not through their web browser. The service is ad-supported for those who want to use the free version; the premium subscription service is ad free.
But users aren’t the only ones enamored with the service. Venture capitalists are investing, to the tune of $50 million recently, and all of the major labels have also taken a stake in the company. In fact, it’s said that the labels are making more money from Spotify than from iTunes in some of the markets where the service is already available.
On the other hand, some other venture capitalists expressed skepticism over a proposed $250 million valuation of the company. The skepticism is based on a number of factors:
- The service hasn’t launched in the US yet. The guessing is that it won’t be available here until early 2010. Its ultimate success depends on acceptance and enthusiasm by users in the US.
- Spotify’s business model is based on the usual mix of subscribers and online audio ads; neither avenue has been the path to success so far for any music service.
- Will it make onto the iPhone? Apple has reasons not to want to make the service available on the iPhone, although other handset makers and service providers may enthusiastically embrace it.
There’s a big buzz on both sides of the Atlantic on Spotify, but expect to the heat to be turned up even higher as a US launch date gets closer.
To read the full Tech Trends from the week of 8/24/09, click here.
