July 14, 2011

Spotify Launches US Streaming Music Service

Spotify launched its streaming music service in the US today after finaally hammering out deals with major record companies.

The company had previously not allowed its service to be used in the U.S. because the labels were not convinced about its ability to make them money.

About 10 million people across Europe use Spotify, and one million are paying for its premium service.

The company has reduced elements of its free product, ahead of the U.S. launch.

In April, limits were introduced on the number of times users of the basic version could play tracks.

Total listening time for the free version of the service was reduced to 10 hours per month.

The move was seen as a pre-emptive concession to U.S. record companies, which have been uneasy about moving to ad-funded or subscription-based distribution.

Research suggests services like Spotify, Last.FM and Rhapsody yield low returns for artists.

Music industry analyst Mark Milligan calculated an average pay-per-play figure on Spotify, based on the Ben Rodgers Band, of $0.004.

Facebook founder Mark Zuckerberg described Spotify's service as "pretty amazing."

The service is likely to face competition in the U.S. from Pandora, which claims it has 100 million registered users.

Premium membership of Spotify in the U.S. costs $9.99.


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