Spotify may still be missing two key major label licensing deals needed to launch. But it appears to be confident enough in its progress to staff up a U.S. team in preparation for bringing the popular European streaming music service to domestic shores.
In the past month, Spotify has hired a VP of engineering and a director of product management -- just two positions, but a leap forward in staff based in this country. The VP of engineering is John Pavley, while the director of product management is Charlie Hellman. Both hail from the now-shuttered P2P service LimeWire, where they held similar roles.
Spotify is not commenting officially on the hires, but sources tell Billboard that they are tasked with building out the U.S. product team. It will be interesting to see whether more Lime Wire employees end up at Spotify U.S. as a result.
The only other U.S. member of the Spotify team of whom we're aware is Ken Parks, the managing director of Spotify USA. He and CEO Daniel Ek have been leading the U.S. negotiations for the last several years. Parks was a senior advisor to Spotify for two years before officially joining as its U.S. head last year. He was formerly senior VP of global strategy and business development at EMI, where he also held the role of VP of legal & business affairs.
Assisting them is Dick Huey, who through his consulting firm Toolshed Inc., is helping with independent label licensing. He started working with Spotify in November of last year. Huey's company also handles the catalog licensing for Merge Records and Righteous Babe. He was formerly VP of new media at Beggars Group and Matador Records.
Another Spotify partner is Splendid, a marketing and communications firm with offices in both London and New York. As for hiring, there's only one U.S.-based job posting on the Spotify website for a regional finance position.
This is hardly a complete picture of Spotify's U.S. operations. Several responsibilities affecting the U.S. launch and service are handled by employees in the company's UK headquarters, and there are likely other US Spotify staffers on board we don't yet know about, since the company isn't talking. (Got a tip? E-mail email@example.com.) But it does provided some insight into potential timing. If Spotify has a fully baked U.S. version of its service ready to go, then it could launch service mere weeks after finalizing its licensing deals. However, from what we know about the licensing process, labels are asking for changes in the way Spotify's service will look here in the U.S. versus in Europe, and those negotiations are ongoing. Ã¢Â€Â¨
That means an U.S. based product team may need to make those changes, test them, and have a support team in place before going live, which sources at other digital music services say would take at minimum two months.
The fact that Spotify is still searching for a US finance lead is less telling. Those responsibilities can easily be handled by the company's UK-based team until a more local choice is found.
As for those licensing deals? Sources tell Billboard that Spotify is gunning hard to land Universal Music Group, the world's largest label in terms of market share. Last week, rumors flew that Spotify and UMG were "weeks away" from a deal, although those claims were disputed by sources directly involved in the negotiations.
Helping Spotify's U.S. efforts is the fact that in October Rob Wells was promoted to head of global digital business for UMG, adding U.S. business development to his area of responsibility. In his former role as senior VP for digital, he struck the label's European Spotify deals, and was a vocal fan of the company, saying it was "a sustainable business model."
However, complicating matters is the $100 million in new venture capital investment the company reportedly received last month. Former label executives say that labels in negotiations learn of such funding rounds and immediately want a cut.
But at least some of that money is going into real salaries for real people holding real jobs. Given how much vapor has been spread regarding Spotify's U.S. intentions over the last two years, this alone is a step worth noting.