Spotify has signed a distribution deal with Universal Music Group, the world's largest music label, according to All Things Digital. Unsurprisingly, both Spotify and Universal have declined to comment. The streaming company doesn't need all four labels to launch in the US, though it would certainly help, but because it now has three out of the four, Spotify will likely soon launch in the US.
The popular European music streaming service was originally planning to launch in the US by the end of 2010. As we know, that didn't happen. Last month, a rumor started up that Facebook would be partnering with Spotify, though no money is being exchanged. Last time we heard, Spotify still didn't have a US launch date to announce other than "this year." The service recently passed the 1 million subscriber mark, making it the biggest paid music service in the world.
Four months ago, Spotify reportedly struck a deal with EMI Music and five months ago, the company signed a deal with Sony Music Entertainment. Spotify thus has three of the four major music labels; the other one left is Warner Music Group.
US labels have hesitated to support Spotify's model as they don't believe it can be profitable. 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 £16.40 million, and a net loss of £16.66 million after taxation.