Spotify, the on-demand digital music service, is close to formalising the last record label deal to allow it to launch in the US next week, with a three-tiered pricing model similar to what it has developed in Europe, according to people familiar with its plans.
Warner Music had begun providing encoded copies of thousands of recordings to be “ingested” on Spotify servers before lawyers approved the details of the fourth and final label contract, these people said.
Barring unexpected delays, they said, Spotify would open its doors to US customers as early as the middle of next week, with a free, advertising-supported tier for personal computer users only; a $5 a month ad-free subscription for PC users; and a $10 monthly ad-free service for mobile subscribers.
In the UK, Spotify charges £4.99 ($8) a month for PC subscriptions and £9.99 for mobile subscriptions.
However, the service, which carries an endorsement from Mark Zuckerberg of Facebook on its promotional US homepage, will not be immediately integrated with the social network in the US. The timing of that launch “will be driven by Facebook”, one person familiar with the plans said.
After putting pressure on Spotify to show that it could convert more free listeners to paying subscribers, many music executives now have high expectations for what the US service might do for them in the world’s largest music market, where legal digital revenues are still dominated by Apple’s iTunes.
The launch comes after figures from Nielsen Soundscan showed the first six-month period of modest growth for the industry in seven years, with US sales up nearly 1 per cent in the first half from a year earlier, led by hits from Adele, Lady Gaga and Mumford & Sons.
Digital track sales rose 10.6 per cent to 661m units, better than the flatter picture a year earlier.
Independent record label representatives say they have increased market share in Europe among users of Spotify, which encourages discovery of less mainstream music through sharing playlists.
This week, Spotify and Virgin Media announced a partnership that gives the UK cable company’s 4m customers access to the music service’s catalogue of 13m songs through their TV set-top box, laptop or mobile phone.
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