AUSTIN, Texas--It turned out to be just a rumor that Spotify CEO Daniel Ek would use his Tuesday keynote at the South by Southwest Interactive Festival (SXSWi) to announce that the streaming music service would be expanding from Europe to the U.S. Ek said onstage that the stars just aren't aligned yet, and that he would rather wait than launch a lackluster Spotify.
"The most important thing for us when it comes to the U.S. launch is the fact that we want to build the best product that we can," Ek said. "Here you have to strike deals with almost 5,000 different publishers, and then the collecting societies and then the labels, but the big thing for us now is just working on the next generation of Spotify and getting it out there." In other words, negotiations have been a headache.
Spotify currently has about 7 million users, around 320,000 of whom pay for a subscription to opt out of audio and display ads, despite being technically restricted to six European countries. But eager to try out the service, many in the U.S. and elsewhere have capitalized on sneaky workarounds and Internet proxies to get Spotify for themselves. Ek presented a live demo of Spotify's desktop software and Android app to the audience, ostensibly novelties because the service isn't available in the U.S. Interviewer Eliot von Buskirk, a music journalist for Wired magazine, had polled the audience to see who had tried Spotify, and when a surprising number of hands went up, von Buskirk joked, "So everybody's from Europe?"
Crowds had turned out for the keynote because Spotify is one of those rare music services that actually might have potential--its attractive design, focus on playlist creation and sharing via URLs, and simple interface have won it many fans. Some might say that Ek, a 26-year-old from Sweden, is naive because he still believes that there's money to be made in digital music--a model that's time and again proven to be a cash drain and an investor disappointment for just about anyone not affiliated with Apple. He said over and over that the music industry needs to embrace multiple revenue streams, truly believing that it's the only way that the money will come in.
"There isn't one business model that will save the music industry, but it's about figuring out how to use downloads, how to use subscriptions, how to use merchandising, ticketing, and all these things," he said.
Ek did hint that one of Spotify's big plans right now is to get its product on other platforms. "Most of the other (non-iPhone) handset manufacturers lack a really good media player, and we've seen that people tend to use Spotify as a media player on Nokia handsets, on Android handsets, and so on," he said. "It's been very cumbersome to get your music on a BlackBerry phone or a Nokia phone from your iTunes library, and that's something we want to sort out."
It's beyond mobile, too.
"We want to enable your library on all these devices, whether it's a set-top box, an Xbox, a mobile phone," he said. "We want to make music like water."