Spotify-Google iTunes killer lacks licenses

A rumored deal between Spotify and Google isn't likely to come Tuesday, but if it does, it won't offer songs from most of the major labels.

Don't look for Spotify and Google to roll out an iTunes killer on Tuesday.

If a Spotify software application is offered with Google's Nexus One phone, it won't include music from at least three of the four major labels, according to several music industry sources.

TechCrunch on Monday reported that Google and Spotify, the Swedish company that created the most-buzzed-about music service in Europe, had discussed offering a Spotify app on the much-anticipated Nexus One phone that Google is expected to debut on Tuesday.

In the same story, however, TechCrunch reported that the "deal had likely gone cold."

I went to my music industry sources to see what was up. What I learned from them is that Spotify started speaking to the largest recording companies about acquiring licensing to deliver music in the U.S. a long time ago but hasn't reached a deal with at least three major labels.

TechCrunch also reported that negotiations between Spotify and the labels have faltered because Spotify wants to offer a free music service in the U.S., presumably supported by advertising, and the labels are balking.

The recording industry has seen how tough it is to generate profits from selling ads and has largely given up on the ad-supported business model. The list of failed ad-supported music services is long and includes SpiralFrog , Imeem , and Ruckus.

Look for more Spotify rumors to circulate around the Web. The site's user experience has generated great word of mouth overseas and that has touched off lots of anticipation in the U.S.

But here's the reality about the company: Spotify managers haven't demonstrated that they know anything more about turning users into dollars than their American counterparts. Whether Spotify will make a splash here or whether it can even produce profits at home have yet to be determined.

 

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