UPDATED 09:17 EDT / JUNE 13 2011

Spotify, iCloud Battle for US Music Market

London-based Swedish music services company Spotify is making its way to become a superpower in the online music industry. The “to die for” factor in their new attack of the business is their “freemium” service. Without ads involved, users are able to do music streaming on the desktop and mobile, picking they favorite songs from the library of millions. They can purchase these songs and store it in their Android or iPhone. Also, Spotify has the ability to sync with iPods—a reason why many feel that the company may be able to crush iTunes once it comes to the United States.

Speaking of traversing seas and lands to reach the US soil, Spotify has long been enjoying its stint as a premier provider in Europe. Two weeks ago, Universal Music Group and Spotify inked an agreement for US licensing, helping the music streamer to (legally) cross the pond. Capturing the imagination of the digital era’s music lovers, the company prepares to extend its winning streak to another continent. This deal comes as an addition to early contract signed with EMI Group Ltd. and Sony Corp.’s Sony Music Entertainment. The only music label that has yet to reach an agreement with Spotify is the third largest, Warner Music Group.

The developments are setting the path for Spotify to invade the US territory. Ben Sisario of The New York Times offered some insights on how a pact with Warner Music Group will make this happen for Spotify. He said, “It was not known when Spotify will unveil its American service. To introduce a competitive product, the company will need to complete its deal with the Warner Music Group, and sign many independent labels, but some music executives say that if it rushes to market Spotify might decide to begin without those deals. (Warner, the third-largest music companies, releases music by acts like Madonna, Green Day, Led Zeppelin and Bruno Mars.) One person briefed on Spotify’s plans said it was hoping to open its American version in mid-July.”

Since its initial launch in 2008, the company has presented immense potential to be a frontrunner in the market. This is also the reason behind the confidence investors have in Spotify. Last February, the music streaming service enterprise reached the billion-dollar valuation mark via $50 million additional funding from Kleiner Perkins. The same month, Spotify took up mobile music subscriptions and now serving both computer and mobile phones. Two months later, one of the biggest breaks came knocking on their door when Facebook introduced their music service and partnership with Spotify.

Without a pinch of doubt, all this hype and development within Spotify’s field is an indication that it could very soon go up and challenge Apple Inc.’s iTunes. With iCloud coming into the picture, will Spotify hold its pieces together and be the first to outgun iTunes? Their entry to the US market will be the moment to watch.


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