Spotify, the legal streaming music startup that has wowed even Mark Zuckerburg, has now had its iPhone app approved by Apple, and now awaits an appearance on the App Store. How did they get an app approved which streams thousands of music tracks on demand and which potentially competes with iTunes? The short answer is no-one is saying quite how, but it’s pretty easy to surmise that iTunes won’t be affected since the app will only work for paying Spotify subscribers, who currently pay a premium subscription which currently stands at €10 a month in Europe. In which case Apple’s policy of blocking apps that duplicate native apps (like iTunes) would not apply. The green light from Apple now leaves the way open for Spotify to launch in the US, as it’s been planning, and attempt a massive change in the music industry for the record labels that have invested in it. No mean feat.
An Apple spokesperson has now confirmed the app is poised for launch in the App store and Apple “has been in constant communication” with Spotify prior to the launch. So TechCrunch would just like to say: we told you so.
As we pointed out when we reviewed the developer version of the iPhone application, Spotify co-founder Daniel Ek has said all along that they “have a great relationship with Apple” and Apple has already approved several other music services such as Lastfm, Deezer and Pandora. In addition, he said “we’ve spent significant time and resources to ensure we’ve stuck to Apple’s developer guidelines point by point.”
In other words Spotify had pretty much bet the farm on this app being approved and they would not have done so had they not got got the nod from Apple that the app was highly likely to be approved.
Here’s a official video of the app in action:
Spotify is now valued at €170 million, or about $242 million, with a post money valuation of around €200 million. That means the company has roughly doubled in valuation from a year ago, when investors bought stock at a €100 million post money valuation.
That’s not to say Spotify doesn’t have its sceptics. As our own Sarah Lacy, recently wrote, there are at least six “leaps of Faith” VCs have had to get over to invest in the startup, which has yet to leave Beta.