Spotify hits 1 million subscribers; U.S. still out

Music service reaches an important milestone. However, it's still unavailable in the U.S., and its latest statement says nothing about an eventual launch here.

Spotify has reached an important milestone, but Americans are still waiting for their chance to try it out.

The music service announced today that it has hit 1 million subscribers. The company reached the figure nearly two years after it tallied its 1 millionth registered user. Spotify's Web site says it now has 10 million such users.

The discrepancy in users compared with subscribers is due to Spotify's business model. The company offers a free, ad-supported version of its service, allowing people to stream music for a limited amount of time. It also has a premium service that allows for unlimited access to music on mobile phones and offline, as well a cheaper paid offering that's ad-free. On its Web page, it claims to have 10 million tracks available.

As excited as Spotify's management may be to reach 1 million subscribers, the key issue with the platform--availability--has yet to be resolved.

For years now, Spotify has made it known that it wants to come to the United States. However, it's currently available only in the U.K., Sweden, Spain, France, and a few other European countries. Its trouble in coming to the United States has nothing to do with its service and everything to do with its negotiations with the top record labels.

So far, the company has been able to strike a deal with EMI and Sony to offer their songs in the U.S. But that's not enough, especially considering it would face off with entrenched competitors, like Rhapsody, that have a much wider catalog of titles.

As CNET's Greg Sandoval pointed out earlier this year, the key to Spotify's U.S. launch is Universal Music Group , the world's largest record label. If Spotify can get that label to sign on, the service can launch in the U.S. and potentially coax Warner Music into a similar deal. But as history has shown, the music industry can be difficult to navigate for companies that don't necessarily follow the iTunes model of "pay per song."

 

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