Spotify’s US Launch In Danger as Negotiations Break Down

The company is still aiming at a late 2010, early 2011 launch

Spotify’s US launch is becoming something like Duke Nukem Forever. Initially slated for late 2009, it has been delayed several times. Now it’s taken another hit as negotiations are said to have hit a dead end. This could move the launch of the service well into 2011. The latest target for Spotify was late 2010, possibly early 2011 in the worst case scenario. According to Billboard, the worst case scenario has happened as negotiations with the four major labels have grounded to a halt.

The reason for the break-down in negotiations, apparently, has to do with Spotify’s desire to offer a free service in the US like it does in the countries it is already available. The freemium model is preferred by Spotify management, but the labels have been unwilling to agree to a free music streaming service in the US.

Spotify has been wildly popular in Europe and has several million users already. The basic service is ad-supported and free for the users in the countries it operates in. However, this model has not proven particularly profitable. Spotify also has several tiers of paid services which remove the ads and provide additional features like mobile apps and offline listening.

But Spotify has been having trouble converting the millions of users to the paid subscriptions. This, along with the less-than-spectacular performance of other free music streaming services in the US has spooked the major labels. Since Spotify announced its intentions of launching a US service, several other companies have launched music streaming services there and the market is a lot more crowded than it was just a year ago.

Those services offer paid subscription options only, with the basic service at around $5 per month and the premium one, with access to mobile apps, at around $10. Both Google and Apple are said to be building cloud music services, likely slated for a fall launch. If and when Spotify finally lands in the US, it may be facing some rather tough competition.

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