Spotify closes $100M round in advance of U.S. launch

Spotify has finalized a new round of funding totaling around $100 million as it gears up for its long-planned U.S. launch later this summer. All Things Digital reports venture firms Digital Sky Technologies, Kleiner Perkins Caufield & Byers and Accel Partners led the round, which was in the works for over six months but did not close until last week. Spotify declined to comment on the report.

Spotify's Jonathan Forster says its expansion to the U.S. is imminent.

Spotify's expansion to U.S. shores is imminent according to general manager of Europe and global vice president of ad sales Jonathan Forster. Speaking last week at an Omnicon event in London, Forster said the digital streaming music service won't go live in the U.S. until July 5 at the earliest, but he confirmed the company has secured the record label deals necessary to enter the American market. "We're signing the remaining deals as I speak," Forster added.

Earlier this month, The Wall Street Journal reported that Spotify completed a distribution deal with Universal Music Group, adding the company is also in advanced discussions with Warner Music Group. Spotify previously signed distribution pacts with major labels EMI Group and Sony Music Entertainment. The firm has announced and missed several previous U.S. start dates, but conventional wisdom has long stated that Spotify needed to secure content from at least three of the four major label catalogs to gain significant traction among American consumers.

Spotify now boasts more than 10 million registered users across Europe. Insiders say major American record labels have consistently pressured the firm to jettison its current free content approach in favor of a guaranteed revenue model, citing the impasse as the culprit behind Spotify's absence from the U.S. market. While about 85 percent of Spotify users in Western Europe tune in to the free, ad-supported version of the service, reports indicate that the major labels want Spotify to follow the lead of rivals like Rhapsody and eMusic by introducing premium monthly subscriptions to U.S. consumers, enabling the music industry to share in resulting revenues.

The premium Spotify service costs U.K. subscribers £9.99 per month (about $16 U.S.) and offers desktop and mobile access to unlimited, ad-free music. In April, Spotify instituted narrower limits on the amount of music available to users opting for the free version, a move to migrate consumers to the premium offering. The Wall Street Journal adds the step was also critical to convincing label partners to license their music for U.S. consumption.

For more:
- read this All Things Digital article

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