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Spotify doomed? Music industry slaps down Swedish start-up

One of the greatest music services on the planet is being eaten away by the music industry over dated geographical licensing rules, and the community has revolted

The greatest music application since the first version of Napster, Spotify, has been forced to remove certain material at the request of the recording industry.

The incredible Sweden-based streaming music startup, which has been gathering enormous respect from music lovers around the globe, has been hit with the corporate baton of music licensing. Simply put, vinyl, CDs and cassettes have been bound by geographical licensing agreements since day one, and despite the global nature of the Internet, these location-specific licensing complications have been carried forward, rather than modified. And that means services such as Spotify have to block certain music from users in certain countries.

Additionally, Spotify has said that some of the music in its catalogue was delivered to it accidentally, and that the service was, at the request of bands and the industry, not permitted to offer these tracks in the first place.

The music that has been wiped depends on what country you access the service from. Here in the UK, we know Tool's catalogue has vanished, along with songs from Arch Enemy, Aborted, The Smiths, Boards of Canada, Frank Zappa and Stone Temple Pilots. A Spotify spokesperson didn't immediately respond to our request for comment regarding which other artists have ordered to have their music pulled.

The community revolts
What does this mean for the music industry? Well, a good number of the people listening to ad-supported music and paying good money for the service are now cancelling their subscriptions and publicly announcing they're going back to pirating music and stealing it over BitTorrent.

This is what's called cutting off your nose to spite your face. With the current complications the music industry faces, it's more like smashing several nine-inch nails (pun intended) through an already bruised and broken hooter.

An official blog post from Spotify's management has attracted over 300 comments slating the music industry for hobbling one of the most promising, money-making music services around. Users are taking their money and heading back to The Pirate Bay and Limewire.

Inevitably there's a Facebook protest group set up to 'save' Spotify, which you can join here.

All the music that is to be removed has now gone, so tracks still available will remain available. Deals with all four major record labels are still intact, as are deals with many independent labels. There's still a great deal of promise left in Spotify, and we hold faith that this action isn't as major as some people perhaps think -- a couple of majors dropping out would be far more damaging, and that hasn't happened.

Spotify, money and you
Spotify was founded in 2006 by Daniel Ek and Martin Lorentzon, employs 45 people, and makes money from inserting short audio advertisements between the occasional song or album, as well as the odd display ad. Users who don't want to hear ads can pay a subscription, which costs either 99 pence a day, £9.99 a month or £99 a year.

We expect some users will be furious enough to demand a refund for their subscription. We've contacted Spotify to find out whether this will be possible, and will update this story with any response.

To read more about the Spotify service, check out our first look report, and to get an invite to the currently private free version, head to our dedicated forum thread.