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July 15, 2011 12:32 pm
Spotify finally made its debut in the US this week as the European music-streaming service looked to take on a wide range of competitors in the world’s largest music market.
The digital jukebox’s US launch was much delayed, in part by Spotify’s insistence that its free service, seen as crucial to attracting new users, was retained in America despite label resistance.
Some analysts and music industry executives have questioned whether the free service was financially sustainable – either for Spotify, which must pay out fees for every track played, or for other legal services such as Pandora, which risk being undercut.
But Spotify showed that it was getting better at converting free users into paying customers. After taking two years to reach its first 1m paying customers in Europe, Spotify said this week it has gained another 600,000 subscribers in the last three months, since tighter limits were put on the amount of free listening available.
Spotify’s software for PCs and smartphones allows users to search a library of 15m tracks and instantly play them over the internet. Its free service, interspersed with advertisements, is used by 10m people in Europe and thousands more have already signed up in the US.
Two years of bruising negotiations with American record labels have not stemmed the Anglo-Swedish company’s appetite to expand yet further. Daniel Ek, Spotify’s 28-year-old co-founder and chief executive, told the Financial Times that he hoped to launch its on-demand internet music player in more countries before the end of the year.
Charles Caldas, chief executive of Merlin, the independent music group, said: “The DNA of what makes Spotify successful is they have held their line in making sure the service is constructed around what the end user wants and demands from a music service.”
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