Spotify already has 30,000 U.S. users. So why hasn't it launched there yet?

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European music startup Spotify has all its “ducks lined up” for a U.S. launch, we’ve heard from multiple sources. It has servers ready to go in the US and, crucially, users already there, even though it has not yet officially launched. In fact it has 30,000 users in the U.S., according to the chatter coming out of the Stockholm tech scene where the company has its main development arm. But these users are being kept quiet.

So why isn’t Spotify launching in the U.S. right now?

It has a wealthy Asian investor in Li Ka-Shing, who invested in Facebook in 2007, Northzone Ventures and Creandum as backers. It has investment from the big music labels – Universal Music Group, Sony BMG, EMI Music, Warner Music Group. It also has “strategic” investors, which include rights holders in other geographic locations, according to our sources, and a mooted $250 million valuation.

We’ve also heard that monetization of the platform is going gangbusters, with most of the upgrades to premium subscriptions being driven by the ability to hold a library of music on the iPhone and Android.

Even Google is on board.

So what gives?

The simple reason, as one of our well placed sources close to the company tell us, is this blunt fact: “Warner are being arseholes.” Yes, that’s a direct quote.

As you will no doubt recall, Warner was the one music label which had huge legal wranglings with YouTube, until the video site eventualy called its bluff and deleted all of Warner’s artists from the service. It was only after that happened that Warner came back to the negotiating table, some months after.

But our information is that Spotify has actually been technically ready for a US launch since October last year. It is only protracted legal negotiations with Warner which is holding everything up. All the other labels are apparently now on board.

Now, of course that is just one side of the story. But Spotify knows that it can’t launch in the US without Warner’s artist roster in its catalogue.

UPDATE: We checked with Spotify and a spokeperson had this to say: “We have great relationships with all of our label partners and we don’t have 30,000 users in the US, this is completely factually incorrect.”

We stand by our sources.

  • corey

    interesting. sources outside of spotify maintain that spotify simply isn’t going to launch in the usa. meanwhile, heres the real news – rdio launched. in the usa. with deals in place. all of them. including wmg.

    • George

      This is why I don’t understand all the hype surrounding Spotify. We already have many great music streaming services stateside. What does Spotify bring to the table that sets it apart from the others? Is it just that new music streaming service smell?

    • David

      Rdio has launched, but I don’t know anyone who has access yet.

    • Fireproofjeans

      At this moment, I’d bet Spotify has more American and Canadian users (Like me) than they know. It’s not too hard to create a profile using a proxy just to try it out, and since Swedish developer Markus Persson of Minecraft started a Minecraft playlist, there’s been plenty of new users – myself included.

      All I need to work out is having spotify think I’m actually in Birmingham now – Normal Proxies don’t work.

  • Chris

    Wait, so again, you guys go live with a story, only to update it within minutes of posting it, stating the whole story is a complete lie?

    How are you guys allowed to continuously get away with this?

    • Wolfgang

      +1. Couldn’t agree more.

    • Steve O'Hear

      Just because a company denies something, doesn’t mean it’s not true. It’s not our job to echo PR but to do to our own digging and find our own sources. It’s called journalism. At the same time, it’s only right to give you the company’s response/side of the story too. Hence the update.

      • http://twitter.com/mikebutcher Mike Butcher

        We stand by our sources.

      • Ric

        So that means you’re calling Spotify liars?

      • James M

        Here is a source. I am one of those 30,000 users.

        I used an IP spoof years ago to sign up and download the player and recently started using a prepaid gift card from the UK to become a premium user so I could listen on my iPhone.

    • http://www.robertbasil.com Robert Basil

      +2

      Because this is TC and they don’t have to have any facts to write a story.

      • Brent

        You guys keep mistaking TC as a reputable news source. It’s not much more than an US Magazine for the tech world.

        TC staff may disagree, but they’d never last in an old-skool journalism environment.

      • Steve O'Hear

        I think you’ll find we did just fine

      • http://brandonpaton.com Brandon Paton

        “they’d never last in an old-skool journalism environment.”

        Hmm…. I think you meant to say that old-school journalism isn’t going to last with sites like TechCrunch.

      • Shoppingadda123

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      • Shoppingadda123

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      • Shoppingadda123

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      • Shoppingadda123

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      • Shoppingadda123

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      • Shoppingadda123

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      • Shoppingadda123

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    • http://webhighdef.com Fitim Blaku

      I’m in the US and I use it. I love it.

      • http://www.JohnVasko.com John Vasko

        How do you get on from the U.S.?

      • Sam

        I’m in SIngapore. I use it. I love it.

  • Ben

    I think Spotify just re-launched their free version as “Spotify Open” :)

    No invite needed for 20 hours free streaming per month.

  • Chem

    Mike just to be clear, you were bored and made this story up off the top of your head?

    Super job dude, 99.9999% of TC stories are interesting and entertaining, but the remaining 0.1111% ruins TC’s name for the rest of the guys that are doing a great job.

    • k-0s

      “Super job dude, 99.9999% of TC stories are interesting and entertaining, but the remaining 0.1111% ruins TC’s name for the rest of the guys that are doing a great job.”

      LOL thats 100.111%, sounds like TC is working overtime to me!

  • Nils

    A direct quote from an anonymous source? How is that possible?

  • Bernd

    So funny to see how bad people from the US want this… We have to wait for iPad, you wait for spotify hehe

    but yeah Spotify is great and can’t wait till it gets big!

  • http://787media.com Javier V

    I’ve been using Spotify @ the U.S. for more than a year.

    Best thing ever.

    • http://www.JohnVasko.com John Vasko

      How did you get an invite?

  • http://www.jukata.com Jack

    You should check out jukata.com , you can sync all your music to the internet and listen on the phone and web.

  • Henk

    Must be 30,000 US users with a fake UK account via a UK proxy or with contacts in Europe to buy them Premium (with global access).

    Of course Spotify denies this!

    • Leojeen

      Those 30000 are accounts created in the old days when Spotify was having problems figuring out proxies. You can’t do that anymore, if you have an old account, you can keep asking people to sign in for you from a legitimate location.

      • Matthew

        I signed up for it last month. Used a proxy to get a Spotify account. Then used a fake UK address to set up a paypal account to purchase the premium service.

      • http://www.facebook.com/nickburch Nick Burch

        Hi Matt trying to do the same thing… I know this is from a while back but how did you link a US credit card to the paypal account? It doesn’t seem to let me change the country form UK for the billing address? In other words how did you get funds into the account?

    • am

      You don’t need a contact in the UK… just setup a UK paypal account with your US bank info. Works like a charm. With auto monthly payments, you’ll be able to stream from anywhere in the U.S.

      As for the free account, just use TOR every 14 days to login to the client from a UK IP and your golden there too. ;)

  • http://bubbytimes.blogspot.com Richard

    THis must come out of the Warner announcement months ago that sites like Spotify are bad for the music market.

    I really don’t understand how promotion that you get paid for is bad for a band. I’ve discovered loads of artists on Spotify which I’ve gone on to buy physical products for.

  • Sub Bot

    Fix these please:

    “It fact it has 30,000 users in the U.S.”

    “We’ve also heard that monetization of the platform, is going gangbusters,”

    “eventualy called it’s bluff and deleted all of Warners artists from the service.”

  • http://rm64.com/2010/06/03/meet-me-in-the-cloud-rdio-launches/ RM64.blog » Blog Archive » Meet Me in the Cloud: Rdio Launches

    […] Meanwhile Spotify continues to be quiet on any U.S. launch, though there’s been recent speculation about one major label holdout in particular and that there is already a small segment of users in […]

  • Anonymous

    The labels aren’t making any money from spotify – hence the delay in the US.

  • Ben

    Aside from the headline (which is an attention getter) they don’t report “Spotify has 30,000 US users says CEO” no, they say it is chatter. Also, every day Spotify doesn’t launch in the US, they are loosing money, I live in the US and use Pandora and Grooveshark on my Android phone. I do have access to Spotify, and use it on my laptop and really enjoy it. That’s my 2 (American) cents.

  • http://www.jailbreaknews.com/guides/do-you-spotify/ Do You Spotify? | JailbreakNews

    […] you live in the US, chances are you have no idea what I am talking about. There is apparently only 30,000 American users or less, according to Spotify. Even if there are thirty thousand, this is tiny compared to the amount that […]

  • http://not-ify.tumblr.com stew

    spotify is denying those numbers for good reason: if it were true that use of its application is that widespread among u.s. users (which it is), then it would beg the question of whether spotify is currently paying royalties for streaming music to u.s. users.

    the short answer? they’re probably not.

    to stream music in the u.s., spotify needs to have licensing deals in place with both music publishers and music labels (neither of which are in place right now despite over a year of ongoing conversations). they would also need to be tracking, reporting and making payments to the rightsholders who control rights for the music spotify is letting its beta users stream.

    this is a good story, and it shouldn’t be hard to run down. just call the national music publishers association and ask if spotify currently has a deal, and if they’re currently making payments for u.s. streaming by spotify users. then call the major labels and ask if they are currently being compensated by spotify for its beta users’ streaming in the u.s.

    if spotify is allowing users to stream music without having the appropriate deals in place, or without making payments for u.s. users’ streaming, then it is (to say the least) problematic under u.s. copyright law. and it might explain why a label might be inclined to be “arseholes.”

  • http://facebook.com/captbunzo Paul Thompson

    Spotify is awesome. One of the best things about my Android phone (HTC Desire). :)

  • http://nerdragepodcast.com/nerd-rage-010 Nerd Rage 010 | Nerd Rage

    […] *Article Link […]

  • Detlef U

    Here is a great post with step-by-step instructions for setting up Spotify in the US:
    http://hurwi.net/blog/?p=139

  • http://www.drewshannon.net/rdio-first-impressions/ Rdio First Impressions | DrewShannon[dot]Net

    […] service being announced next week to possibly take the place of the now-defunct Lala (RIP), and Spotify still appears to have serious legal obstacles standing in the way of a full US launch. For Rdio’s sake, I hope they can siphon off some […]

  • http://wp.arcticstartup.com/2010/06/07/spotify-techcrunch-and-30000-users/ Spotify, TechCrunch And 30000 Users – ArcticStartup

    […] Thursday, TechCrunch wrote about Spotify having 30 000 users in the US and questioning why it hasn’t launched there yet. […]

  • http://villevesterinen.com/?p=475 Spotify, TechCrunch And 30000 Users – Ville Vesterinen

    […] Thursday, TechCrunch wrote about Spotify having 30 000 users in the US and questioning why it hasn't launched there yet. The […]

  • Joe
  • http://gubatron.com Gubatron

    In the meantime rdio.com is already out, and I must say it’s quite awesome.

    And the monthly fee is worth less than 2 starbuck cups.

    Been streaming non stop all night since I got the invite.

    • Chris

      I also have Rdio, have 10 invites as well. Rdio and Spotify offer identical services, but Spotify has 3-4 million more songs. Rdio just launched so this could change.

      Rdio has launched in the US with Warner as a partner. Why is Spotify having issues if Warner? I would switch to Spotify because its well established, has a big user base, and has been out for longer. Till then, I’m sticking with Rdio.

      • Fireproofjeans

        Rdio is probably pressuring Warner to stick with them, because if Warner goes to spotify, Rdio will die.

  • http://eu.techcrunch.com/2010/06/10/spotify-launches-on-tvs-in-sweden-finland-with-teliasonera/ Spotify launches on TVs in Sweden Finland with TeliaSonera

    […] to feel like Spotify – the hot streaming music service in Europe which is said to be prepping a US launch – may have a better future dealing with service providers and device manufacturers than […]

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