A Millionth Subscriber for Spotify, a Million Miles from Napster

Tuesday, March 08, 2011

The online music service Spotify, which boasts a considerable classical music catalog thanks to its relationship with Naxos, this week surpassed its one-million subscriber mark. Last month, the company raised new financing from investors, including Kleiner Perkins Caufield & Byers, at a valuation of more than $1 billion.

"It’s with a sense of real pride and excitement that we can announce a new milestone today, having welcomed our millionth paying subscriber to the service," Spotify posted on Tuesday to its blog.

A Spotify representative was not immediately available for comment.

Considered a (much smaller) European answer to iTunes, Spotify is an advertising-supported service that allows users to access online music for free. Users may also opt for a monthly subscription plan. The service facilitates users to build and share playlists. The company has said it plans to enter the American market soon.

In February, 2009, Spotify struck a deal with Naxos, one of the world’s leading classical music labels, allowing users access to one of the largest and fastest growing catalogues of classical recordings with over 100,000 exclusive tracks across more than 2,500 titles.

Naxos joined a long list of established music labels that have teamed up with Spotify, including Universal Music Group, Sony BMG, EMI Music, Warner Music Group, Merlin, The Orchard and CD Baby.

“We are committed to developing the world’s biggest music catalog and our deal with Naxos reconfirms our intention to offer the most diverse" Daniel Ek, Spotify founder and CEO, said in a statement.

But a rising demand for Web-based music access, leaving major music labels to jockey for position more than ever, has heralded seismic change in the online music sharing world since the landmark debacle of Napster.

"What's happened since Napster is it has become easier to get music and the prices are cheaper," commented Thomas Ewing, principal consultant for Avancept, a San Francisco-based intellectual property consulting firm. "I would guess that because of social media, artists will be able to interface with the public much more directly. Then I'm not so sure what the major recording companies would do. But that's business, not law."

Music Score Library Reports Major Growth

Elsewhere in the world of intellectual property sharing recently, and close to the hearts of classical music listeners, the International Music Score Library Project, has grown to be one of the largest online sources of scores, a development that has reportedly nettled traditional music publishers. When downloading one of the site's 85,000 scores, users are reminded to obey all applicable copyright laws. It's a set up that has particularly gotten under the skin of European publishers.

"There's a little bit of a different flavor just generally in Europe compared to the United States," said Ewing. "Things like monopolies and abuses of a dominant market position tend to be taken more seriously in Europe than they are here."

The International Music Score Library Project is run by Harvard Law School student Edward W. Guo. Spotify is headquartered in London, with additional offices in Sweden, France, Norway, Spain, Holland and the U.S.

"There are a number of cases where technology comes along and it changes the way a business functions," Ewing said. "The internet has disrupted the way a lot of business was conducted in the past, and all of that is still in the process of being worked out."

Even a casual look around the Spotify Web site will reveal just how dramatic these changes are for those who may recall an earlier landscape of tighter controls and impediments to sharing.

"With Spotify, there are no limits to the amount of music you could listen to," the Spotify Web site reads. "Just help yourself to whatever you want, whenever you want it."

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