Is Spotify really "a few weeks away" from signing Universal Music Group to a licensing deal, as reported in a recent Reuters story?
"Anything's possible," a source from one of the companies involved who requested anonymity told Billboard.biz, but essentially said that the Reuters piece is inaccurate. There are at least a half dozen deal terms still in negotiation that are described as "very fluid." And while it's not impossible that those could be resolved in a few weeks, the source said that is highly unlikely.
Virtually every step of Spotify's long, winding road to the U.S. music market has received the kind of press scrutiny normally reserved for Apple product rumors and speculation about Google Music's launch.
Apple and Google are Internet bellwethers that dominate their respective markets (Apple in digital music downloads and portable devices, Google in search and ads). Spotify, meanwhile, is a startup chasing a model that has yet to prove profitable. So why does it get so much attention?
There are a few reasons. First, Spotify is very savvy about courting the press. Before it launched in the UK, it provided analysts, journalists and other tastemakers with early access to the service in order to get them hooked on the experience and convert them into allies. It's followed that same strategy in the U.S. There's not a tech, business, or music industry reporter or blogger that hasn't been using Spotify on at least an experimental basis of more than a year.
Second, Spotify raised eyebrows with the numbers it has managed to put up overseas. It has 10 million registered users, 750,000 of which are paying. That's considered a pretty successful consumer response even if it hasn't reached profitability yet. "If it can rake up number like that in Europe, just think what it can do here," is the thinking.
Third, there's the Tech v. Label meme that so many blogs here like to perpetuate, which goes something like this: Spotify is the people's champion for digital music overseas, but the big bad labels in the U.S. won't let us experience it here because of their greed and shortsighted strategic shortcomings. The tech press in particular loves a good "us vs. them" story and this situation is tailor-made for such coverage.
Fourth, Spotify finally has some momentum. It's already signed Sony Music Entertainment and EMI music to U.S. licensing deals this year. A recent $100 million funding round adds more wind to the sails. The dominos are starting to fall and a launch announcement is considered imminent -- with some rumors pointing to SXSW as a possible launch date, but that seems unlikely.
If UMG does get on board, Spotify could easily go live with three majors and a slew of indies. After all, Vevo did, and it's doing just fine without Warner Music Group content to this day. (Although to be fair, WMG content is all over YouTube, and that's still the main music video portal that matters today). But licensing deals are only half the story. Spotify will still need to staff up and get its infrastructure in place here to avoid a sloppy consumer launch.
Is Spotify going to launch in the U.S? Of course. When? Probably in the next few months. Will it matter? Well, that's the big question, isn't it? Fortunately, there will be plenty written about it every step of the way ...