14 DAY TRIAL // Spotify is currently one of the most popular music streaming services in Europe, and it has been striving to enter the US market for some time now. It seems that the timing is finally right for them, as they are reported to have signed a deal with Sony Music Entertainment. Although this has not been officially confirmed by Spotify, MediaMemo reports that the Swedish company has succeeded in closing the deal they had been working on since the autumn of 2010.
The new agreement basically resembles the ones that are already used by Spotify in Europe, offering users the possibility to stream several hours of music without charging them, while the mobile versions or the ones with no advertisements will require a fee.
The choice of signing with Sony before selecting any other US partners was probably prompted by the fact that this label company currently works with artists such as AC/DC, Alicia Keys, Leona Lewis or OutKast, also including the tracks of Michael Jackson.
Needless to say, Spotify will not be able to enter the US market and be profitable unless they close deals with at least two other record labels that will secure them a good starting point.
On the other hand, the reason Spotify has failed to break the United States market so far was exactly because they could not sign the required agreements in the first place, therefore US citizens should not rejoice just yet.
The Swedish company will definitely strive to close these deals as soon as possible, especially since its revenue went down in 2009 when they lost $26.7 million, due to expenses, sales and distribution.
Consequently, they are surely looking at ways to boost popularity and entering such a large market like the US is a wise move.
In the end, the fact that they signed with Sony will clearly work as a good omen and might even convince other labels that Spotify is a startup worth investing in.