Given the time zone difference, Spotify was unable to comment on the original story, but the company has since cleared up a few things. The rumor that the Founder’s Fund Sean Parker may have been approached to lead the company’s U.S. operations is not true. Kenneth Parks, former senior VP of strategy and business development at EMI Music came on as U.S. managing director in June, and a company spokesman says there are no plans to change this structure.
Regarding the licensing status, Parks said “We are in fact in a good place with our label negotiations. We’re confident in our U.S. launch later this year.”
Sources say Spotify has almost completed deals with some of the major labels. Billboard’s sources say that there was a major change in the negotiations—or “reboot”—that helped achieve this. Whether Spotify has merely “tweaked” its service terms to meet U.S. labels’ concerns or in fact wiped the slate clean is an area that remains unclear and likely won’t be answered until Spotify goes public with the details of its U.S. operation.
Spotify's licensing negotiations with the major music labels have reverted back to square one, Billboard.biz has learned from multiple sources.
Having failed to persuade the major record labels to go along with its vision for a U.S. version of the popular European service, Spotify in the last month has approached the labels with a clean slate to determine what type of service would be possible to launch before the end of the year.
Spotify has been eying a U.S. launch for almost two years, originally expecting to go live in this market in 2009. But some labels, most notably Warner Music Group, have gone on record stating their displeasure with the "freemium" model that Spotify champions, which offers unlimited streaming for free under an ad supported model designed to drive users to a premium paid tier that eliminates ads and offer mobile access.
Spotify CEO Daniel Ek has insisted he wants to offer Spotify in the U.S. under a similar sort of model, with perhaps some changes to the length of time that the free tier would be available. But so far the four majors have not agreed on any common ground.
Earlier this month, Ek reiterated his claim that the service is on track for launching before the end of the year, but also hinted that he'd delay it into next year if that's what was required to ensure Spotify launched under the model he envisions.
But Billboard's sources say Spotify is open to short-term deals that would allow it to launch a framework of the service by the end of this year, designed to evolve over time as the in-dispute elements are revisited.
Exactly what parts of Spotify's European service might be included in a U.S. version is unclear, as the sources say the details are still being worked out.
Representatives of Spotify did not respond to requests for comment at press time. But Billboard will update this story as it evolves.
Spotify is already facing a PR backlash for its continued promises and delays, although the U.S. music industry shares in the blame as well. Meeting a 2010 launch deadline would go a long way to quell not only the growing cynicism of the press, but also appease its investors. Spotify needs a U.S. launch to bring in the revenues needed to justify its estimated $250 million valuation.
While Ek has taken residence in New York to bring the company's label negotiations to a close, one source says Spotify has approached Founders Fund managing partner Sean Parker to lead the company's U.S. operations, but that's not been confirmed. Parker of course was an early co-founder of the original Napster, and served as Facebook's founding president. Founders Fund reportedly invested an undisclosed sum in Spotify this past February.