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Spotify rumored giving out advance cash to rush US launch

updated 05:50 pm EDT, Wed October 27, 2010

Spotify said very close to US through cash advance

Spotify may finally be edging closer to its promised US launch as a leak this afternoon hinted that it had taken drastic steps to get music label deals. A number of tips maintained that it was still without US deals but has been promising large cash advances to labels to earn their confidence. Multiple touching points are left, but Spotify has "never been closer" to a deal, CNET understood.

Among the concerns has been the conversion rate of ad-supported free users to paying subscriptions. Less than 10 percent of Spotify's current European base has been willing to pay the monthly fee, those aware of the service's problems said. Major music labels have wanted the rate closer to 15 percent for it to be viable. Warner Music head Edgar Bronfman is widely known to have rejected Spotify's model in the US, at least initially, since he didn't see it as profitable versus pay-per-track music.

Publicly, Spotify has vowed to get itself into the US by the end of the year, but until the rumored breakthrough it had been regarded as near-impossible. Spotify is one of the most popular sources of legal music in Europe, but ad-reliant services like iMeem largely flopped with the American public. Spotify's primary advantage would be its large catalog, if it can mirror its European results, as well as mobile apps for Android, iPhone and Symbian.

Apple was rumored to have discouraged labels from signing onboard because of the possible impact it would have on iTunes.

No one from Spotify or its potential partner labels has been willing to comment so far.



By Electronista Staff
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