updated 02:25 pm EDT, Fri September 17, 2010
Spotify yet to get deals with any US labels
Spotify's problems getting US deals may still be ongoing if claims from music industry sources are accurate. None of the major labels have signed deals and might not have time to make one before the end of the year, the contacts told CNET. Publicly, Spotify has been insisting it was close to striking a deal for much of the year.
Among the issues keeping the service are Spotify's low rate of turning free customers into paid subscribers and, equally, Google Music. The search engine's plans for downloadable and streaming music have positioned it as an alternative to iTunes that would be more interesting to labels. Google's scale and established business are believed more appealing than Spotify's startup-level revenue.
The service may soon have 10 million active users in Europe but would run against American preferences towards pay-per-track sales both from users and executives. iTunes represents 28 percent of all music in the US while subscription music services like Rhapsody or Microsoft's Zune Pass have struggled. Similarly, while most major labels are onboard with Spotify in Europe, they have been concerned that bringing Spotify to the US might gut sales in the country. Warner chief Edgar Bronfman argued that free-to-premium services like Spotify were "not net positive" and that his firm wouldn't commit to the idea.
The service has earned most of its appeal through a desktop app that provides either ad-sponsored free tracks or ad-free subscriptions, but it has lately garnered interest through mobile apps for Android, iPhone and other devices.