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Spotify Facebook Music Collaboration Likely, Spotify Worth $1 Billion

Spotify Facebook Music Collaboration Likely, Spotify Worth $1 Billion

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By: Spacelab Research Staff
June 20, 2011

You love to hear about the Spotify U.S. launch, don't you? We constantly get teased by little pieces of information that float out of the Spotify-U.S. launch story. Today we've learned that the last holdout of the four major recording labels, Warner Music Group, seems to be in the bag for Spotify.

The digital music service has now secured deals with Universal Music, Sony Music and EMI Music, leaving Warner Music as the (usual) last major label to get on board with licensing. All in all, Spotify has 1 million subscribers in Europe and over than 10 million registered users overall.

"Multiple sources tell me the Universal deal was finished this week. Spotify declined to comment; a spokesman for Universal hasn’t responded to requests for comment. Spotify signed on Sony and EMI Music Group earlier this year," reads the report from Peter Kafka at All Things D.

The report says that Spotify has now closed a round of investments at around $100 million from DST, Kleiner Perkins and Accel. Spotify has been working to raise money from these groups for about 6 months, although they just finished working on the deals. Supposedly this puts the value of Spotify at $1 billion.

This would provide a nice wad of cash to help them expand into the U.S. market, a long told tale that seems to be happening in slow motion. Now that Apple has launched their iTunes in the Cloud offering, the labels seem primed to start looking to other services to license.

So now Spotify has all four major labels on board, a nice cash infusion, so what's the next step? Social media of course. Facebook Music would allow Facebook users to listen to a song simultaneously, in real time, as a shared music experience. They'd have the full run of the Spotify streaming music service inside of the Facebook tent, to keep Facebook users "inside the compound."

According to GigaOm, the new Facebook Spotify music offering would be listed under a tab in the left-hand column of a Facebook page, alongside Photos, Friends, Places (etc.) and will be a "music dashboard" that integrates music recommendations from friends. Details are unconfirmed so far, but it looks like this area would not be limited to Spotify, but will be a music dashboard for a variety of music platforms, like iTunes in the Cloud, MOG, or whatever streaming music service your Facebook friend uses.

This type of Spotify - Facebook arrangement would be consistent with deals Facebook has done with others like FarmVille video game maker Zynga. Facebook has also worked with partners like Warner Bros.in the past to provide streaming movie and video services. It appears that Facebook doesn't want to build these services themselves, but rather offer them from third parties to Facebook users.

Check out more about steaming music sites in the Spacelab Streaming Music Guide.

Tags: Spotify, Universal Music, Digital Music News
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