COLOGNE, Germany - Swedish online music service Spotify will launch in Germany, the world's third-largest music market, just after midnight on Monday. The launch is Spotify's biggest since its U.S. bow last year and key for the company, which needs to expand rapidly to justify its $1 billion valuation.
With 3 million paying customers, Spotify is the world's largest online music subscription service but it will face established competition in Germany, in particular from Simfy, a similar all-you-can-hear style music service which launched in Germany in 2010 and is backed by equity investors including Earlybird Venture Capital. Simfy has a carriage deal with Kabel Deutschland, Germany's largest cable operator, which serves some 9 million customers across the country. Spotify will be entering Germany with no such distribution deals in place, though agreements are expected to follow the launch.
Spotify's pricing structure for Germany will be similar to other European territories. After a six-month free trial period, subscribers shell out around $6.50 (€4.99) a month for unlimited online use or $13 (€9.99) a month for Spotify's premium service, which includes mobile access to the group's music catalogue of more than 16 million songs.
Germany marks the 13th country for Spotify but it is a key market. German music sales passed those in the U.K. two years ago, making the territory the third-largest music market after the U.S. and Japan.