Spotify vs. Itunes

There’s a lot of buzz about Spotify’s upcoming iPhone app. Apple is deciding whether to let it be an official app or not. Is this the reason why Apple wont approve the application?

Spotify now making universal more money than iTunes, in Sweden

Unlikely as it may seem, since other ad-supported music sites are finding things challenging lately, Spotify may actually be bringing record labels a big pay day - well, at least in its native Sweden.

“In five months from the launch, Spotify became our largest digital source of income and so passed by iTunes“, according to Per Sundin, managing director of Universal Music, the world’s bigget major, in Sweden (via SwedishWire). “It’s a fantastic development, explained by the fact that Spotify really has exploded”.

Spotify’s arrangements with royalty collectors are closely guarded, at least in the UK, so it’s difficult to say exactly how much it’s paying out. But bear in mind that Sundin referred to Spotify’s streamed service itself, not the white-label affiliate music retailers like 7Digital that power its buy-to-own downloads…

If true, this begins to pose some problems for Apple (NSDQ: AAPL), and begins to validate Spotify’s business model - if it can pay out more money from ad income than iTunes is from a la carte purchases prices, that would be a watershed.

But it would also be surprising - bit by the ad downturn and ongoing royalty outgoings, Last.fm has introduced radio subscriptions in some countries, YouTube has pulled premium music in the UK and Germany while baulking at royalty outgoings; We7, too, is experimenting with premium offerings on top of its core free. So we’ll keep our eyes peeled for now. Spotify has been courting labels for other territories and hopes to roll out in the U.S. in Q3 or Q4.

Source:
TheDigitalContentBlog: http://www.guardian.co.uk/media/pda/2009/aug/26/spotify-digital-media