Forum Views ()
Forum Replies ()
Read more with google mobile :
Spotify nears Universal label deal, no Warner yet
Yahoo!
My Yahoo!
Mail
More Yahoo! Services
Account Options
New User? Sign Up
Sign In
Help
Yahoo! Search
web search
Home
Singapore
Asia Pacific
World
Business
Entertainment
Sports
Technology
Weekend Edition
Spotify nears Universal label deal, no Warner yet
Reuters - Thursday, February 24
Send
IM Story
Print
By Yinka Adegoke
NEW YORK - Spotify, the popular European digital music service, is "a few weeks away" from inking a deal for U.S. rights to songs from Universal Music Group, the world's largest music company, according to people familiar with the talks.
But the London-based startup, which was valued at up to $1 billion this week by investors according to reports, could end up launching without Warner Music Group, the No.3 music label group, one person said.
And there are still doubts internally at Universal Music about whether a deal will be reached soon, according to another person familiar with the label owner's plans.
Spotify, which was founded by Swedish entrepreneurs Daniel Ek and Martin Lorentzon, has captured the imagination of digital music fans in Europe where it is the market leader with a streaming music service much admired for its intuitive and slick customer interface.
The service works on a so-called 'freemium' model which offers a vast choice of music for free with advertising on the hope that it will convert a good portion of users to its premium paid service. The premium service does not feature ads and allows users to choose their songs as many times as they like.
Spotify has licensing deals with all the major music companies in Europe. In the U.S. it has announced a deal with Sony Music and sources confirm it has also reached a deal with EMI.
But executives at both Universal Music and Warner Music have expressed concern that offering free music on Spotify could cannibalize sales at services like Apple Inc's iTunes Music Store or harm competing paid music subscription services like Rhapsody and MOG.
A Universal Music spokesman said his company is still in negotiations with Spotify but would not elaborate on the timing. Warner Music declined to comment.
One of the biggest concerns for the label owners is whether Spotify will be able to convert enough users from its free service to a paid-for subscription. Spotify says it has 10 million registered users of which around 750,000 are paid users, in other words a 7.5 percent conversion. Insiders say Spotify is projecting a 6 to 8 percent conversion rate, which they worry may not be enough to cover costs for the loss-making startup.
"They need to have a conversion rate of 15 to 18 percent if they want to stay in business," said one executive, who asked not to be named since the talks are confidential.
Added to existing concerns about Spotify is the likelihood that new cloud-based subscription services will launch this year from Google Inc and Apple -- with a revamp of its iTunes service.
"It doesn't make sense to give away so much music up front with Spotify if we don't quite know what Google and Apple's plans are yet since Spotify would have to compete with these guys after they launch," said the same executive.
While a deal with Universal Music, owned by French media giant Vivendi, could still happen early enough for a Spotify summer launch according to several people, it could mean the service launches without Warner Music whose chief executive, Edgar Bronfman, was alone last year in publicly expressing his doubts about Spotify's business model in the U.S.
One person said Spotify was prepared to start off without Warner's acts which has 20 percent of the market with acts like Bruno Mars, Death Cab for Cutie and Red Hot Chili Peppers.
Even though there are no advanced talks between both sides at present there's still a possibility of a last minute deal, the person said. Bronfman was more positive about Spotify's European contribution on Warner Music last earnings call earlier this month. "We do see very real growth from Spotify and we do see Spotify, and services like Spotify, as being evermore meaningful to our results," Bronfman said.
Spotify was reported in several outlets to have raised $100 million in funding this week at a valuation of around $1 billion. The company declined to comment on the funding reports or on any of its label deals.
Recommend
Send
IM Story
Print
Related Articles
US-TECH Summary Reuters - 41 minutes ago
Taiwan OKs Chinese investment in chips, LCD-sources Reuters - 42 minutes ago
Nokia engineers hope for best as job cuts loom AFP - 2 hours 43 minutes ago
Google Ventures invests in power-saving technology Reuters - Thursday, February 24
Samsung launches ultra-slim notebook, targets Apple Reuters - Thursday, February 24
News Search
Top Stories
BASF says 2020 profit tripled to 4.56 billion
In US state houses, Tea Party bills spark outrage
World's coral reefs could be gone by 2050: study
'Locked-in' patients happier than thought: study
Oil prices hit multi-year highs amid Libya unrest
More Top Stories »
ADVERTISEMENT
Most Popular
Most Viewed
Oral sex linked to cancer risk
Moody's lowers Japan rating outlook to 'negative'
World markets tumble, oil spikes on Libya unrest
Libya shockwaves hit Italian businesses
Machu Picchu victim of own success: UN
More Most Viewed »
More Most Recommended »
Elsewhere on Yahoo!
Financial news on Yahoo! Finance
Stars and latest movies
Best travel destinations
More on Yahoo! News
Home
Singapore
Asia Pacific
World
Business
Entertainment
Sports
Technology
Weekend Edition
Subscribe to our news feeds
Top StoriesMy Yahoo!RSS
» More news feeds | What are news feeds?
Also on Yahoo!
Answers
Groups
Mail
Messenger
Mobile
Travel
Finance
Movies
Sports
Games
» All Yahoo! Services
Site Highlights
Singapore
Full Coverage
Most Popular
Entertainment
Photos
Yahoo! News Network
Copyright © 2011 Yahoo! Southeast Asia Pte. Ltd. (Co. Reg. No. 199700735D). All Rights Reserved.
Terms of Service |
Privacy Policy |
Community |
Intellectual Property Rights Policy |
Help
Other News on Thursday, 24 February 2011 U.S. sanctions Iran officials for protest crackdown
Commerzbank to start repaying state aid
Citigroup, BofA, 4 others cut HP price target
US existing-home sales rise above year-ago pace
Saudi king back home, orders $37 bln in handouts
World's coral reefs could be gone by 2050: study
DirecTV profit beats Street; shares rise
Israel to Europe: Iran ships augur nuclear spread
Kadhafi loses swathes of east to insurrection
Cables show Libya pressed oil firms to reimburse terror costs
|
Libya live report
Two CIA contractors spirited out of Pakistan
|
Israel to let 300 Palestinians in Libya into West Bank
|
Libyan leader should not use violence, Malaysian PM says
Fresh gun battles erupt in Ivory Coast's main city
|
Philippine remains 'sold as Japan war dead'
Troubled Pakistan win World Cup opener
Long-range rocket from Gaza hits Israeli city: police
|
Pakistan arrest shines spotlight on U.S. contractors
Pressure on Japan PM grows as MP leaves govt post
Umar Akmal helps Pakistan post 317-7 against Kenya
Oscar is golden, but film business shows some tarnish
Judge tells Lindsay Lohan guilty plea means jail
Apple shareholders nix succession but OK board rule
|
US-ENTERTAINMENT Summary
Signs of life in quake damaged building-NZ rescue official
South Korea suspends Deutsche Bank brokerage unit
Apple to host March 2 event, iPad 2 in the wings
|
S.Korea suspends Deutsche Bank brokerage unit
S. Korea suspends some Deutsche Bank operations
Deutsche Bank says regrets S.Korean sanctions
Pakistani stocks fall further, close at 2-½ month low
Mass rally against inflation in Delhi
Deutsche Bank's Seoul unit suspended: report
Asia Naphtha-Taiwan Formosa, S Korea Honam buy up to 300,000T
US-TECH Summary
DirecTV profit beats Street; shares rise
Judge tells Lindsay Lohan guilty plea means jail
|
Paltrow to join Coldplay husband in UK charts
|
Oscar is golden, but film business shows some tarnish
|
Justin Bieber leads U.S. pop album chart
|
Threat to girls' education in Afghanistan: report
BASF says 2020 profit tripled to 4.56 billion
Clinton condemns Iran crackdown
Google-backed startup zaps electricity waste
Iran overcoming nuclear program problems: Barak
U.S. sanctions Iranian officials for protest crackdown
Apple to host event, iPad 2 in the wings
World grapples for response as battles divide Libya
|
'Locked-in' patients happier than thought: study
Afghanistan seeks US help post-2014
UK verdict on WikiLeaks's Assange extradition due
New Zealand puts quake toll at 98, many more missing
|
Oil prices hit multi-year highs amid Libya unrest
Rocket from Gaza Strip strikes Israeli city
Apple succession call nixed, board rule OK'd
Lohan faces jail over gem theft, US judge warns
Spotify nears Universal label deal, no Warner yet
Chinese official dismisses Jasmine protest calls
|
Long-range rocket from Gaza hits Israeli city
US oil hits $100 a barrel amid Libya unrest
UK verdict on WikiLeaks's Assange extradition due
|
Apple invite hints at March 2 debut of new iPad
Taiwan mulls total freeze on imports of Philippine workers
Yemen's Saleh orders protection for protesters
|
3D helps drive global box office to $31.8 billion
NATO's successful Afghan night raids come with high
|
Washington Post profit hurt by newspaper weakness
Distressed residents flee New Zealand quake city
Mexico captures suspects in U.S. agent's killing
|
Museum launches online timeline of 9/11 attacks
Chinese official dismisses "Jasmine" protest calls
U.N. council to look into tougher North Korea sanctions
|
Samsung launches ultra-slim notebook, targets Apple
Mexico captures suspect in US agent's killing
Fresh gun battles erupt in Ivory Coast's main city
|
Obama breaks silence, condemns Libya crackdown
Palin to make rare foreign trip to India
Rocket from Gaza Strip strikes Israeli city
|
Kadhafi ordered Lockerbie bombing: ex-minister tells paper
Countries rush to evacuate citizens from Libya
Severe food shortages in N.Korea: aid groups
All to play for in S.Africa-W.Indies World Cup clash
Canada's Arcade Fire collect more British honours
U.N. council to look into tougher North Korea sanctions
Hawaii legalizes same-sex unions
Hope evaporates for survivors of N. Zealand quake
"King's Speech," "Social Network" lead Oscar picks
New Zealand puts quake toll at 98, many more missing
Gucci and John Richmond: The modern dandy meets party girl
US art sleuth claims new Michelangelo find
Apple succession call nixed
|
Justin Bieber leads U.S. pop album chart
Oil up, stocks mixed on Middle East concerns
Paltrow to join Coldplay husband in UK charts
Samsung launches ultra-slim notebook, targets Apple
|
S. Korea prosecutors probe German bank
Swiss franc at all-time dollar high on Libya fears
UK verdict on WikiLeaks's Assange extradition due
|
Judge tells Lindsay Lohan guilty plea means jail
Seoul shares slip 0.6 pct on techs, refiners
Taiwan OKs Chinese investment in chips, LCD-sources
|
Indonesia cleric says arms training is God's will
YouTube banks on Bollywood, cricket for India
|
Taiwan Formosa sells fuel oil cutter at 2-yr high premium
Yemen LNG says sees full gas production in six months
Museum launches online timeline of 9/11 attacks
|
NZ quake toll 98, grave concerns for 226
Google Ventures invests in power-saving technology
|
Pakistan
3D helps drive global box office to $31.8 billion
|
BRIEF-Moody's says Korean ABS performance remains stable
Taiwan sell T$25 bln T-bills at 0.71 pct yield
King's Speech, Social Network lead Oscar picks
|
Judge tells Lindsay Lohan guilty plea means jail
|
Elizabeth Taylor feeling stronger, still in hospital
|
Chris Brown allowed near Rihanna, 2 years after attack
|
Afghan suicide blast kills agent, wounds 26
Kadhafi digs in triggering expatriate exodus
Elpida says may raise DRAM prices in March
UK court agrees Assange extradition to Sweden
|
Afghan suicide blast kills one, wounds 26
YouTube banks on Bollywood, cricket for India
Israeli jets hit Gaza after rocket attack
Iran warships dock in Syria, Israeli fears dismissed
Taiwan OKs Chinese investment in chips, LCD-sources
Egypt's Suleiman survived assassination bid
U.S. says Cuba sets trial date for jailed contractor
|
Nokia engineers hope for best as job cuts loom
Iran warships 'to dock in Syria': Iran commander
Google Ventures invests in power-saving technology
Syria may have built atom site near Damascus
Samsung launches ultra-slim notebook, targets Apple
Iraqi shoe-thrower arrested for supporting protesters
|
Vietnam axes Vinashin steel project with Malaysia
Apple stockholders keep CEO succession plan secret
Special Report: As China grows, contest intensifies for labor
|
Taiwan protesters throw flowers at China envoy
French foreign policy fiasco may end in government reshuffle
|
Thai PM refutes 'dual nationality' allegations
Samsung makes breakthrough in color display technology
Cambodia criticised over attempts to regulate NGOs
CIA, Pakistani cooperation scaled back after shooting
US students trade unruly Cairo for uneasy Jerusalem
U2 to play Glastonbury festival
Men's cosmetics take off in China
Party animals set tone at Milan fashion week
Apple takes wraps off new MacBook Pro lineup
|
Elizabeth Taylor feeling stronger, still in hospital
Shanghai passes one-dog law
Dish Network loses subscribers in fourth quarter
|
Piers Morgan, Larry King spar over CNN veteran's jibe
UK court agrees Assange extradition to Sweden
|
Elpida says may raise DRAM prices in March
|
U2 to play Glastonbury festival
|
German cross-eyed opossum to land in Oscar gift bags
|
From Beatles to ballet, McCartney writes for dance
|
Royal couple in spotlight at first official visit
|
Greece at new risk of being pushed off euro
Bodies of missing Tenn. mom, Jo Ann Bain, and daughter found
Female Breasts Are Bigger Than Ever
AMD Trinity Accelerated Processing Units Now in Volume Production
The Avengers (2012 film), made the second biggest opening- and single-day gross of all-time
AMD to Start Production of piledriver
Ivy Bridge Quad-Core, Four-Thread Desktop CPUs
Islamists Protest Lady Gaga's Concert in Indonesia
Japan Successfully Broadcasts an 8K Signal Over the Air
ECB boosts loans to 1 trillion Euro to stop credit crunch
Egypt : Mohammed Morsi won with 52 percent
What do you call 100,000 Frenchmen with their hands up
AMD Launches AMD Embedded R-Series APU Platform
Fed Should not Ignore Emerging Market Crisis
Fed casts shadow over India, emerging markets
Why are Chinese tourists so rude? A few insights