Business Matters: A $3 Billion Valuation Brings Spotify Expectations Back to Earth
Business Matters: A $3 Billion Valuation Brings Spotify Expectations Back to Earth

Subscription Services Gone Global
-- The days of the single-market subscription service are over and the land grab is upon us. From Spotify to Deezer, companies are looking for growth well beyond their countries of origin. Operating in more countries means more capital is required, but it also allows a subscription service to use a single product -- with local music catalog -- in numerous markets.

Rdio is putting a heavy focus on Europe and is eying Asia, Rdio head of strategic relationship Scott Bagby tells paidContent. "We'll be expanding in all countries in Europe -- within the next few months, you'll see several pop up." A debut in Asia is further down the line, he says.

U.S.-based Rdio launched in the U.S. and Canada in August 2010 and has since expanded to Germany, Denmark, Brazil, Portugal, Spain, Australia and New Zealand. Those are good markets. Germany, notoriously tough for all things licensing, passed the U.K. to become the third-largest music market in the world behind the U.S. and Japan. Spain, Denmark and Portugal are also Spotify markets. If a rising tide lifts all boats, those are good markets for Rdio. Australia just became the sixth-largest recorded music market in the world -- not bad for a country of just 30 million people.

Brazil is a fast-growing economy and a sensible place for growing digital music services. Rdio is helped in that market by its partnership with mobile carrier Oi. "Brazil, as a developing market, has issues with skepticism on credit card payments -- people trust their mobile providers a lot more," Bagby tells paidContent.

But Rdio is hardly alone with global ambitions. French streaming service Deezer also has plans for aggressive international expansion. After launching in the U.K. the company announced plans to expand into 130 additional markets -- but not the United States. The company announced on March 15 expansion to Eastern Europe and put the number of countries in which it operates at 46. Entries into some markets are aided by partnerships. In Luxembourg, for example, Deezer partnered with mobile carrier Tango to bundle their respective services.

Simfy is available in Germany, Austria and Switzerland. Rhapsody only recently expanded from the U.S. to the U.K. and Germany with its purchase of Napster International in January.

Finally, Spotify most recently launched in Germany but appears to be preparing for a launch in Australia and New Zealand. It operates in 13 countries and the Faroe Islands.
( paidContent)

New Spotify Apps Off to a Modest Start
-- Spotify's latest round of apps are showing modest uptake after one week. Of the handful of apps at the Warner Music Group's the warner sound app (yes, it's all lower case), the most popular is Bob Lefsetz's "Welcome to My World," with 1,674 subscribers. Another playlist by music blogger Aquarium Drunkard has 759. One by actor Fred Armisen has 451.

The Warner app's "Family Tree" playlists, a collection of songs by artists similar to the featured artist, are less popular, however. The Black Keys has mustered only 170 subscribers, fun. has 159, Blake Shelton has 93, Slipknot has 90 and Dale Earnhardt Jr. has just 66.

The number of subscribers to an app's playlists is not an exact representation of user adoption. Other than Songkick, which announced Wednesday it has signed up 100,000 new users via its Spotify app, no numbers have been made public. But looking at how many people subscribe to playlists discovered in Spotify apps is a good way to measure consumer adoption. After all, Spotify is all about playlists.

Universal's Complete Collection is off to a decent start. Its Lady Gaga playlist has 538 subscribers. But the numbers fall sharply after that. Maroon 5 has 137, Kanye West has 127, Feist has 55 and the Shady Records playlist has only 53 subscribers.

X5 Music's Classify app has playlists created well before the app launched last week. Many of its playlists have subscribers in the range of 750 to 1,500. A day-old "Classical Spring Music" playlist is already up to 101 subscribers.

Playlists at the [PIAS] app tend to have subscribers in the double digits, although a few (Agnes Obel and First Aid Kit) have 187 and 114, respectively, possibly because of their top-row placement. A Gomez playlist has 429 subscribers but was created last year. Matador's app was not working Thursday and is not included in this assessment.

Universal's Digster also features playlists that predate the launch of the Spotify app, although these playlists are frequently updated with new songs. "Dancefloor" has 9,505 subscribers. "Hits! Today's Hottest Tracks" has 13,640 subscribers.

Launched in December, Soundrop has proved to be a popular app. Many of the rooms have between 200 and 300 listeners at any one time. The dubstep room is the most popular and currently has 1,236 listeners. "Indie Wok" has 559. Given four more months, Spotify's newest apps could easily meet or exceed these numbers.

ReDigi Soldiering On Despite EMI Lawsuit
-- Used MP3 store ReDigi may be getting sued by EMI, but the company is soldiering on. The ReDigi.com website recently got a facelift and the email updates are informative and slick. The company even takes a little jab at music subscription sites by quoting Steve Jobs at the bottom of the most recent email: "People want to own their music. You don't want to rent your music -- then, one day, if you stop paying, all your music goes away."