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Apple among those casting doubt on wisdom of Spotify in US

updated 08:00 pm EDT, Thu October 7, 2010

Spotify US launch may be held up by Apple

Apple may be raising doubts among music labels that are keeping Spotify from a US launch, insiders alleged on Thursday. Senior officials from Apple reportedly told record studios in Los Angeles that they had "serious doubts" Spotify's model, which is led by ad-supported free service and $10 monthly subscriptions, could be profitable. The unnamed CNET sources also noted that Apple thought the service could take away from per song sales at not just its own iTunes store but others as well.

A launch for the European service would be ill-timed as online music sales are cooling down. Many free or streaming-first services have also been either struggling or collapsing, such as the stalled Napster and Rhapsody services or the failed SpiralFrog service. Apple played a hand in this by buying and closing Lala.

Apple's involvement likely has an immediate financial interest not just in safeguarding its lead in US music but possibly in its future plans. The iPad creator is still thought to be working on a cloud-based iTunes that would bring its own music online. It would still run primarily as a pay-per-track store but would store content in an online locker for users to stream to iOS devices or anything else without a local collection. A subscription plan is being tossed about, but CEO Steve Jobs has usually rejected these as "renting" music when customers prefer to own it.

The labels themselves have their own objections that have prevented any label deals and are now very likely to end Spotify's chances for a deal by the end of the year. Warner Music head Edgar Bronfman is well known for having said that ad-supported free music was "not net positive" and that it wouldn't be licensed in the US.



By Electronista Staff
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Comments

  1. ClevelandAdv

    Fresh-Faced Recruit

    Joined: Jul 2004

    +2

    Commercial supported music service

    Here is a sure-to-fail business model: let people listen to music for free and make revenue by playing commercials between songs....that will never work.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +1

    FUD

    Seems like Apple's FUD machine is out and about, trying to keep out any potential competition.

    In fact, I'm surprised Apple isn't telling the labels they should stop letting their music be played on all sorts of Radio or any other streaming system, as they're just giving away sales. Who'd waste money buying any popular song if they can just listen to it on an FM station every hour?

    And we know Apple has always been about making sure the labels make their money.

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