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EMI possibly close to licensing Spotify USA

By | Published on Monday 31 January 2011

Spotify

According to the New York Times, Spotify is very close to getting a North American deal in place with EMI.

With everyone certain a similar deal has already been struck with Sony Music, that would mean the European streaming service is somewhere between a quarter and a half of the way (depending how you look at it) to its long desired US launch. That said, the Times also adds that a Universal deal is some way off, and many question whether Spotify could launch Stateside without the biggest of the record companies on board.

As much previously reported, Spotify’s launch Stateside has been hindered by paranoia among US label execs that licensing the streaming platform’s ad-funded free option could damage the revenues of other digital music businesses – including subscription-based streaming services like Rhapsody and MOG, and a la carte download stores like iTunes. Which is a problem if you are uncertain that the ad-funded model has longevity once Spotify’s venture capital funding runs out, which some label execs are.

But it seems that US bosses at both Sony and EMI have been placated. With neither the labels nor Spotify actually commenting on any of this, it is unclear whether that is by restricting the amount of freely available content, or by writing the majors very large cheques.

Elsewhere, Faisal Galaria, Spotify’s global business development chief has given a very interesting interview to the website of US digital consultancy StrategyEye in which he discusses the various delays to his company’s US launch, and also speculation that Apple may be putting pressure on the majors to hold back from licensing his service, either to protect iTunes download sales, or because the IT giant is planning its own streaming service.

Although stressing he has no actual knowledge of what Apple may or may not have said to the major labels about Spotify, he hypothesises about why the IT giant might not want his service to launch Stateside, and as to why the major’s might be influenced by Apple chiefs.

Noting ongoing rumours of Apple’s own ambitions in the streaming music domain, he muses: “If you assume it takes years and years to build a cloud service – it took us two and a half years – then what do you do in the interim? You use your clout presumably with the labels to say ‘If you do this, I will do X, Y and Z to you'”.

He added: “If you’re the digital team [at a major] and 80% of your revenue was coming from one place, how much are you going to piss them off until someone else can guarantee all that revenue? You’re a nice, fat big executive at label X, Y, Z. You’re getting half a million dollars a year as long as you hit your bonus, are you going to tell iTunes where to go?”

You can read the full interview here.



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