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-- "Spotify is a very sustainable financial model" said Rob Wells, senior VP of digital for Universal Music International, on Thursday. He claims the popular music service, which has yet to launch in the U.S., is succeeding at converting non-paying subscribers to its paid, ad-free version. The company, he said on Thursday, has exceeded a 10% conversion rate in all but two markets - the U.K. and Spain. Wells added that Spotify has 250,000 subscribers globally and is UMG's fourth-biggest digital revenue generator. Lastly, Wells offered a bit of information on UMG's licensing deals with Spotify: In the U.K. and Spain, Spotify pays UMG a fixed amount per stream; in the other four markets, the ones with the higher conversion rates, Spotify pays UMG a share of revenue.

Here's a little math: 250,000 subscribers paying $16.61 (£10) per month comes out to $48.3 million. That a good start but not a huge amount. In the U.S., Rhapsody has over twice as many paying subscribers - but about 1% of Spotify's buzz. If 10% of all users are paying subscribers, that means there are 22.5 million non-paying users. (Given the high number of users in the U.K., it's reasonable to think Spotify's global conversion rate is actually under 10%.) Those 22.5 million users generate revenue for partners like Universal Music Group through advertising. But in the U.K. and Spain, those non-paying users weigh down the company. Every time they listen, Spotify pays. They key to reaching a level of sustainability is limiting the expense related to non-payers. The company has done just that, in fact, by limiting the number of new accounts. As a result, Spotify is not as weighed down by freeloaders. It would help, of course, to increase the percentage of users who become paying customers.

Ultimately, however, the key to a sustainable model is finding the right balance between paying customers and freeloaders. That balancing act will become more difficult as Spotify strives for broad appeal. (BBC, Telegraph

-- Venture capital funding was down 31% in 2009, according to Dow Jones VentureSource. But the year ended well. The fourth quarter, with $6.3 billion dollars from 743 venture deals, was the strongest since the financial collapse. The overarching theme was a retreat from early-stage companies. Deal sizes were smaller and funds went to older-than-normal companies. The IT sector performed well while the capital-intensive energy sector fared worse. Healthcare was down 14% on the year. (Dow Jones)

-- Citigroup has moved for a change of venues in its lawsuit with Terra Firma relating to the private equity firm's acquisition of EMI. Terra Firma had successfully moved the lawsuit to a federal court in Manhattan. Citigroup lawyers are now arguing the case should be heard in a British court. In the lawsuit, Terra Firma alleges that Citigroup of fraud by misrepresenting there was another bidder for EMI and thus driving up the price. Regardless of which courtroom hears the case, the outcome will be of great importance. Terra Firma, which is sitting on billions of Citigroup debt related to the acquisition, is trying to "recover its lost equity of billions of dollars" and obtain punitive damages. In other words, a favorable decision in the case would effectively reduce EMI's acquisition price. (New York Times)

-- Update your records. The Live Nation-owned Nissan Pavilion outside of Washington D.C. is now the Jiffy Lube Live. (InsideNOVA)

-- Warner Music Group will conduct its fiscal Q1 earnings call (for the quarter ended December 31, 2009) at 8:30am ET on Tuesday, February 9. (Press release)