Pulse2 Technology and Social Media News » Spotify

Spotify To Be Valued At $4 Billion After Next Funding Round

Amit Chowdhry — Thu, 17 May 2012 19:03:32 +0000

Social music service Spotify is preparing to raise hundreds of millions of dollars in a deal that would value the company at as much as about $4 billion according to sources with The New York Times. Goldman Sachs is going to participate in the round with about $100 million from their wallet. Spotify’s total round of funding would be at about $220 million.

Spotify was founded in 2006 and operated for several years in Europe before launching in America last year. Spotify was integrated into Facebook and their growth really shot up. Spotify has about 19.9 million monthly active users.

Spotify CEO Daniel Ek said that the company may hit $889 million in revenue this year, but they expect to record a loss. This past February, Spotify raised around $100 million in a funding round led by Kleiner Perkins and DST Global.

Spotify Launches An iPad App

Amit Chowdhry — Wed, 02 May 2012 16:30:50 +0000

Spotify has officially launched an iPad app. The app is brilliantly designed for a larger screen. The iPad app is available to Spotify’s three million premium subscribers, but there is a trial version available. Unfortunately the iPad app does not work with all of the new Spotify apps. The way Spotify works on the desktop is by using a P2P network, which uses your Internet connection to help provide music for other people on the network. The Spotify iPad app streams music directly from Spotify’s servers. Check out the demo video below:

Spotify Reportedly Launching A Radio Service Similar To Pandora

Amit Chowdhry — Thu, 26 Apr 2012 15:55:15 +0000

According to Bloomberg, Spotify will be launching a U.S. Internet radio service that would be a direct competitor of Pandora Media. The new format would be similar to Pandora, which works just like a radio and is cheaper to operate since royalty rates are lower and is set by U.S. Congress. The new service would be monetized by advertising. Content partners have been notified about the new service already.

An online radio would help Spotify attract new users by offering free and ad supported services with the goal of converting them into paying subscribers. About one-third of people that use Spotify have paid plans that have access to unlimited and commercial free music on their computers and mobile devices.

Spotify has about 10 million registered users and 3 million are paying. Pandora has 150 million registered users and 49 million of them have logged in within the last 30 days. Pandora users cannot choose specific songs, but they have access to any artist who music has been published. Royalties paid by Pandora and other online radio services are set by the Copyright Royalty Board, which is a division of Congress.

RUMOR: Microsoft To Announce A Spotify Competitor At E3

Amit Chowdhry — Wed, 25 Apr 2012 19:14:44 +0000

According to a rumor with The Verge, Microsoft will offer a sneak peak of a new music service codenamed “Woodstock” at the E3 conference this year. Woodstock will allow users to share tracks and build group playlists just like Spotify. Apparently it will also have a “scan and match” feature that is similar to iTunes Match. Woodstock is also reportedly going to work on Windows 8, Android, iOS, and Xbox.

Spotify Launching Branded Apps Soon

Amit Chowdhry — Fri, 13 Apr 2012 23:03:05 +0000

Music streaming service Spotify will soon start adding apps from companies like AT&T, McDonald’s, Intel, and Reebok in the next few months to make the platform more intriguing for advertisers. This would help them offset the massive licensing costs that they are dealing with. Earlier today we reported that Spotify was going to likely hit over $800 million in revenues this year, but will likely hit over $60 million in net loss.

Spotify launched in Europe four years ago and in the U.S. last summer. They have hit 10 million active free listeners that hear ads and 3 million users that pay a monthly fee for unlimited ad-free music and access to the Spotify mobile app. That cost is $9.99 per month in the U.S.

Last year Spotify announced apps from music publishers such as Rolling Stone, Pitchfork, and Billboard. Spotify CEO Daniel Ek will introduce the branded apps at the Ad Age Digital Conference in New York next week.

The first branded app will include AT&T’s Surround Sounds app, which will plot the songs to the location where they were written, recoreded, played, and/or performed. This allows people to find music by searching for apps. Reebok’s branded app will have workout playlists. Intel’s Sifter app will recommend songs, bands, and artists based on what Facebook friends are listening to.

Spotify Expected To Hit $889 Million In Revenue

Amit Chowdhry — Fri, 13 Apr 2012 16:02:02 +0000

Music streaming service Spotify currently has 13 million active users and 3 million of them are paying. The company is expected to hit $889 million in revenues this year, which would be up 160% from 2011. However an increase in revenues may also lead to increasing net losses. In 2011 the company’s net losses double to about $60 million.

Spotify CEO Daniel Ek said that the question of when Spotify will hit a profit is irrelevant. “Our focus is entirely on growth,” Ek said in an interview with Dagens Industri. “That is priority one, two, three, four and five.”

Spotify has raised $189 million in funding and has expanded to Australia. The company is currently has a valuation of $4 billion. “We want to build this company long term,” Ek added. “The stock exchange is not an option for us.”

Spotify is opened to additional funding though. “We have no need for more capital to operate the business plan we have,” said Ek in the interview with Dagens Industri. “But I have learned to always take the money [even] when you do not need the money. We work on the principle that if an investor can add strategic value and the valuation is good, we are interested.”

About 70% of the company’s revenues gets paid to the rights holders of the music. This is before Spotify covers their own operational costs. Last year Lady Gaga sold 20 million albums, but hit 1 billion YouTube views in 2010. Ek believes that Spotify can be the company to bridge the sales reality of 20 million albums and the consumer’s appetite for more music (1 billion views).

How To Add Spotify To Your Website

Amit Chowdhry — Wed, 11 Apr 2012 16:50:47 +0000

Spotify’s growth can be attributed to their tight integration with Facebook. To gain additional users, Spotify has announced that they have created a widget for people to integrate into their websites. Some of the websites that have already started integrated Spotify include The Huffington Post, Rolling Stone, and Tumblr. Here is how to add Spotify to your website.

Step 1: Find the song on Spotify that you want to put on your website.
Step 2: Right click on the song and select “Copy Spotify URI.”
Step 3: Go this website and paste it into step 2 of the generator.

Step 4: Click on the copy embed code from the website and paste it into the HTML editor of your blog or website.

You can customize the embed under “Customize embed options.” This feature allows you to change the size of the widget, remove the cover art, and change the theme color.

Facebook Now Lets You Listen To Music With Your Friends Through Chat

Amit Chowdhry — Thu, 12 Jan 2012 19:29:34 +0000

Facebook is starting to roll out a new feature that allows you to listen to the same music that your friends on Facebook Chat are listening to. If you see a music note next to one of your friends on Facebook Chat, you can listen to the same music they are using services like Spotify or Rdio. To listen with your friend, hover the mouse above their name and click the “Listen With” button. If you do not want to share what you are listening to, visit the App Settings page after installing the app. [Facebook Blog]

Why Spotify Will Struggle To Make A Profit

Amit Chowdhry — Mon, 12 Dec 2011 18:17:51 +0000

Spotify is my favorite music service and I hope that they keep growing and doing well. However their business model automatically puts them in a risky position. As a matter of fact, details about Spotify’s music licensing deals have been leaked and it reveals why Spotify will never be profitable.

Spotify has to constantly adjust how much they pay to the music labels. The music labels are able to constantly change around their deal structure by making Spotify pay either an x amount of dollars per subscriber, per-play costs at a certain cost per play, or a certain amount of total company revenue. The labels could fluctuate between these sources of revenue based on where they would realistically make the most amount of money.

On top of that, the music labels receive partial ownership of the company. The music labels also require up front payments from Spotify. Every month, Spotify has to send the music labels reporting including monthly play counts of music.

The music labels also have a “most favored nation” clause that means if another label negotiates a service-friendly deal, they can insist on a similar deal.

Although the terms of service is not in Spotify’s favor, having access to this content is important for Spotify to work and get people to pay for their service. I’m hoping that Spotify executives will be able to get rich off their software eventually despite all these tough agreements Spotify needed to agree to. If Pandora can eventually have an IPO, Spotify should be able to pull it off too.

[GigaOM]

Sonos Updates Android App To Support Slacker and Spotify

Amit Chowdhry — Wed, 30 Nov 2011 21:39:39 +0000

Wireless streaming music service, Sonos, has updated their Android application to support music streaming applications Slacker and Spotify. The Sonos System Software version 3.6 also adds Sonos Wireless HiFi, and support for Android tablets running 2.2. or higher. Below is the press release:

SONOS ADDS MORE CONTROL AND MORE MUSIC TO WIRELESS HiFi SYSTEM

SANTA BARBARA, Calif. – November 30, 2011 – Sonos, Inc., the leading manufacturer of wireless music systems, today announced Sonos System Software 3.6, an innovative update that adds more control and more music to the Sonos Wireless HiFi experience. This free software is available to all Sonos customers via a one button update to their system.

“Today’s feature update reaffirms our commitment to persistently innovate so that Sonos users have the ultimate music experience in every room of the home,” said John MacFarlane, founder and CEO, Sonos, Inc. “Endless music and effortless control are what will keep us as the gold standard for listening out loud in the home.”

The free Sonos Controller for Android now supports Android® tablets as well as smartphones, letting you control Sonos from any Android device. With Sonos, you can stream all the music on earth wirelessly in every room, and now control it wirelessly on a larger screen with any Android tablet running 2.2 or higher, including the Kindle Fire, HTC Flyer™, Motorola Xoom™, Samsung Galaxy Tab™, Sony Tablet S™, and many others. Plus, Sonos Controller for Android includes new enhancements such as alarms, music library management and Twitter support for Android smartphones and tablets alike. Download it from Android Market.

Slacker® Radio is now available as a free music service on Sonos in the United States and Canada. With Slacker on Sonos you can tune in for free to over 150 expert-programmed stations and create unlimited custom stations from a library of millions of songs. You can even read artist biographies as you listen in every room. Upgrade to Slacker Radio Plus for an ad-free experience or Slacker Premium Radio for even more features like on-demand access to millions of songs, albums and artists and the ability to create custom playlists. Subscribers can also fully personalize their ESPN Radio stations with their favorite shows, plus team and sports updates. To register or learn more about Slacker on Sonos, please visit slacker.com/Sonos.

With Sonos 3.6 software, Sonos is also introducing Sonos Labs, a new Beta environment where customers will be able to test out music services before they’re officially launched on Sonos. New music services will be added to Sonos Labs on an ongoing basis. Media and music service developers can learn more about becoming a Sonos Labs music partner at http://musicpartners.sonos.com.

Sonos 3.6 also includes improved Spotify® integration on Sonos, giving Spotify fans on Sonos access to their Spotify Inbox and ability to play music from Spotify’s new releases and top tracks.

Other features of Sonos 3.6 include:

AAC+ codec support

More local language support with Danish and Norwegian

Full details of Sonos 3.6 software can be found here: http://www.sonos.com/support/software_updates/.