Friday, October 8, 2010

Apple Tries to Block Spotify in the U.S.?

Apple is reportedly trying to block the launch of the Spotify streaming music service in the U.S., according to CNET sources.

Spotify has already missed two promised launch dates amidst licensing issues with labels. The music companies are unconvinced of Spotify's business model and are reportedly asking for big upfront royalty fees.

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.

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.

Interestingly, another report today from The Post says that Apple is planning its own music subscription service. Perhaps Apple is asking labels to reject Spotify's service in favor of theirs.

*thanks iclarified*

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