Spotify won't launch in the US this year, will cost $10 per monthBy Emil Protalinski
Spotify CEO Daniel Ek originally expected to launch his music service in the US before the end of 2010. Even one of the company's investors, Napster co-founder Sean Parker, expected a launch in time for this holiday season. That's no longer the case, but Ek maintains that the service will come to the US sometime, and that it will cost $10 a month, according to All Things Digital. Moving to the US will be a huge challenge for the company.
First off, there is competition from subscription offerings offered by Microsoft, Rhapsody, Napster, Rdio, MOG, and Thumbplay. In Europe, where Spotify has taken off, such a variety of subscription services simply doesn't exist. Furthermore, most music listeners buy their music from Apple's iTunes or they don't pay for music at all.
Secondly, Spotify still has to do content deals in the US, which are complex due to the nature of the service. In fact, the online music service has been trying for more than a year, but it hasn't signed a single US deal with any of the four major labels.
Last but not least, Spotify saw a huge financial loss in 2009. The music-streaming company enjoyed revenues of £11.32 million, but endured distribution costs of £608,711, cost of sales equal to £18.82 million, and administrative expenses of £8.29 million. The result was an operating loss of £16.4 0million, and a net loss of £16.66 million after taxation.