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Spotify new leap of faith sees the launch of Spotify in eight new markets. The top on-demand, music-streaming service shows its face to eight countries which include; Mexico, Hong Kong, Singapore, Malaysia, the Baltics and Iceland.
From what I read from the Cnet Article was that the rollouts could come as soon as tomorrow. The endeavour to expand has been a top priority for Spotify, which has a rising user base. The company was launched in the US last year and now has thought to have a user base of 24 million active members 6 million of those are subscribers.
Spotify has become the fastest growing digital music service ever but it holds second place to the internet radio company Pandora. Spotify has now thought to have 28 market territories in all. So why is Spotify expanding? Well the key reasons why the company is doing this is to negotiate better terms with the music labels, which currently take 70% of what Spotify brings in.
The company has already been labelled NO.2 source of digital revenue behind Apple. The CEO Daniel Ek has said his company is on track to pay rights holders $500 million this year alone, which is the same amount they have paid since its launch in 2008.
There is a storm bowling as competition from big tech titans such as Google, Apple and Amazon become there competition as they too add streaming-music services of various sorts. Ek and the Spotify team have to open new markets and build the brand before one of these titans dominates the market.
Spotify however, has its own limits. Every new market requires new deals with music rights holders and the CEO of Spotify has said that this is the biggest limiter to the growth of the brand. The new services for mobile devices and PC’s will have to also be in the local languages.
Spotify has started a heavy marketing campaign which has seen its advertisements on TV channels and on YouTube which has become the go to site for young people to listen to music. Spotify aims to build its brand name in mainstream music fans to be able to compete with the growing competition.