Spotify sets sights on 'all the world's music'

Jul 21, 2011 by Chris Lefkow
After finally launching in the United States, Swedish online music star Spotify now has its sights set on building the world's largest music catalog.

After finally launching in the United States, Swedish online music star Spotify now has its sights set on building the world's largest music catalog.

"We want all the African music, all the Asian music, all the South American music," Spotify co-founder and chief executive Daniel Ek said Thursday at the Fortune Brainstorm Tech conference in this Colorado ski resort.

"Our goal really is to have all the world's music," added Ek, whose company currently offers over 15 million individual tracks for listening on computers or mobile phones.

Spotify launched in Ek's native Sweden in October 2008 and in six other in February 2009, but its arrival in the United States was held up for years by licensing issues with the .

After hammering out agreements with the four major record companies, Spotify launched in the United States last week with the ambitious goal of attracting 50 million US users within a year.

Spotify has 10 million users in Europe and is offering three options in the United States: a free, advertising-supported , an ad-free $4.99 a month plan for computer listening and a $9.99 a month plan allowing subscribers to download as many tracks as they want to an or Android device.

Spotify, which employs around 380 people in Stockholm, New York and London, currently has 1.6 million paying subscribers in Sweden, Norway, France, Finland, Britain, Spain and the Netherlands.

Ek said getting approval to launch in the United States involved proving to the major record labels that "if we create the right product -- one which is better than piracy -- then people are going to come.

"They wanted us to prove that the model actually worked at scale," he said, and "the results in Europe were encouraging."

Ek said Spotify has been met with overwhelming interest in the despite being available by invitation-only for now.

The invitation-only launch proved to be a good idea "otherwise our service would have crumbled from the sheer amount of people who wanted to get access," he said.

Ek said the "vast majority" of Spotify's revenue goes to artists and rightholders and declined to say if the company was profitable.

"We don't really focus on profitability, we're focused on growth," he said.

Ek was upbeat about the future of the , saying "I just refuse to believe that the music industry -- when people are listening to more music now than every before -- that the music industry is going to decline."

The music industry's future, however, revolves around access to music and not ownership, he said.

"If you think about the history it's really been around how you need to buy this record, you need to buy this album or you need to buy this song," Ek said. "And what Spotify is saying is 'ownership is great but access is the future.'"

He spoke of a "very different" model about access to music, not just selling units.

"People just want to have access to all of the world's music," Ek continued. "People want to share a song and that's the song that matters to them in this second. They want to discover music through their friends.

"That's really something people are prepared to pay for whether it's by your time -- watching advertisements -- or paying for music."

Ek said he viewed Spotify as "complementary" to Internet radio Pandora, which has 100 million US users, and expressed confidence it could stand up to online music ventures by technology giants Apple and Google.

"We just focus on ," he said. "I think ultimately companies that do one thing and try to do it really well often succeed much better than companies that try to do 50 things at once."

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