Apple May Be Stepping on Spotify’s Throat Over U.S. Launch

Spotify on iPhone

If you’re a U.S. music lover who enjoys streaming a huge collection to your iDevice rather than carrying it all around with you, you’ve probably at least heard of Spotify — and are still wondering why it hasn’t come to your country.

CNet is reporting that the wildly popular Swedish music streaming service Spotify continues to struggle in its efforts to launch their service in the U.S., and now it appears that Apple may have a hand in keeping the record labels from getting on board as well. The reason? The lucrative business for legal per-song downloads here, which is dominated by none other than (wait for it) Apple’s iTunes Store.

“In meetings in Los Angeles recently, Apple executives told their music industry counterparts that they had serious doubts about whether Spotify’s business model could ever generate significant revenues or profits, according to two sources with knowledge of the discussions,” CNet reveals.

“But Apple executives worried about the effects of a free music service might have on the rest of the market. They noted that it’s tough to sell something that someone else is giving away, the sources said. One industry insider said it is only logical that if Spotify were allowed to launch a free-music service here, at a time when Nielsen recently reported that the growth of digital sales has flattened out, it could eat into the businesses of proven revenue-producers like Apple and Amazon.”

Spotify has had no such problem launching in seven European countries (including the U.K., France and Spain), and has already missed two target dates for its U.S. launch due to the lack of agreements with music labels here. The company is racing to meet a third target date for the end of the year.

The company’s music streaming service already exists on the iPhone in the form of a Spotify app which streams over Wi-Fi or 3G — but U.S. customers can’t get their hands on it until such agreements are in place.

Follow this article’s author, J.R. Bookwalter on Twitter


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