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Tech website Hypebot claims the major label terms [Spotify] would’ve had to agree to “would’ve bled them dry.”
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Labels’ Monetary Demands Threaten European Music Service’s U.S. Debut
European music service Spotify was supposed to make its U.S. bow by the end of last year.

Maybe it’s better that they didn’t.

Tech website Hypebot claims the major label terms the company would’ve had to agree to “would’ve bled them dry.” The Big Four reportedly demanded such large minimum guarantees upfront that Spotify has begun to wonder if it was worth the financial risk.

With the company already nearing profitability in Europe, Spotify, in the mind of some tech experts, should skip coming stateside for the foreseeable future and build their core business overseas instead… by “[perfecting] its model” before coming top the U.S., when “the labels [inevitably] get weaker.”

Still, the Big Four, by insisting on such exorbitant demands, threaten to destroy what could be a major competitor to Apple’s iTunes, something they are desperately seeking.

Meanwhile, the major labels are pinning their hopes on Google’s proposed music service to achieve the same objective.

Google will deflect market share from Apple by way of allowing song buys straight from their search engine, and, best of all, they can do all this without challenging the record industry status quo, which is something the major labels like.

By delaying its introduction in the States, though, Spotify has lost out on several major deals struck by competitors. Berkeley-based start-up MOG and Rhapsody are now both being carried on all Verizon 4G LTE phones. Users will be able to access MOG for $10 a month, with a subsequent charge appearing on their phone bills.

Like Spotify, MOG users pay a monthly subscription for the right to download and listen to all the music they want. The service also has a unique feature that lets users create stations based on single artists, then control how much variety they want with a slider, much like Pandora.


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