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Spotify launches in the US

July 21, 2011

On-demand music service Spotify is now available in the US. The company had first announced US expansion plans over two years ago, but has only recently managed to secure licensing agreements with the four major record labels.

The service is already available in Sweden, UK, Norway, France, Denmark, Finland and Spain. The company claims 1.6m paying subscribers, up from 1m in March 2011.

The company offers three service tiers in the US

  • Spotify Free is invitation only at launch; the tier offers unmetered ad-funded access on PC
  • Spotify Unlimited, priced $4.99 a month, removes advertising from the PC service.
  • Spotify Premium, available at $9.99 a month offers an ad-free experience on portable devices (Android, iOS, Windows Phone 7, Palm and Symbian) and music systems (Sonos, Logitech Squeezebox)

Both paid tiers are available without an invitation. Spotify has also partnered a number of companies (including Motorola and multi-room music equipment maker Sonos, alongside with Coca-Cola, Chevrolet and others) who will be distributing Spotify Free invitation through their promotional campaigns.

Spotify enters the US market having secured a significant mindshare before its launch. While there are a number of cross-platform subscription services offering essentially the same and similarly priced premium service as Spotify (Rhapsody, Napster, MOG, Rdio), unlike in Europe, the US music market currently has no high-profile freemium on-demand music services (with the possible exception of Grooveshark, which still faces legal challenges from Universal Music Group). It should be noted, however, that freemium model is prominent among US personalised radio services - e.g. Pandora and Slacker.

Following a succession of free service restrictions, the free version of Spotify's service in Europe (currently users get first six months of near-full Spotify experience - with exception of device-based access - and 10 monthly hours thereafter with restrictions on repetitive track plays) has evolved into a more of a promotional tool, rather than a full-fledged ad-funded service of its own. It seems likely that the company will adjust its state-side Spotify Free offer after it amasses a critical mass of registered users.

It is also of note that Spotify's partnership deals at launch are a departure from company's European strategy where its partner companies would either subsidise Spotify Premium service, bundling it with their products (e.g. an early promotional deal with Telenor back in 2008) or resell Spotify subscriptions (e.g. Virgin Media in the UK).

 

 

Tags:

Countries: USA
Companies: Spotify
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