Spotify, the UK service for free downloads has delayed it's US launch until 2010. Sources from several of the major labels here in the states are concerned that Spotify's ability to convert enough ot it's free users to paid subscribers.
However, sources in three of the four largest music companies (EMI, UMG, SONY, WEA) told the Financial Times that record labels' financial concerns were the greater hurdle. "We think Spotify is a great service but they're going to have to convince us they can convert enough people from free to paid subscriptions to make it worth our while," one label said. "As an ad-supported service the economics don't work at all."
Music Industry Executives want solid evidence that Spotify could achieve a conversion rate of about one in 10 users paying for a premium service such as its iPhone application. The conversion rate figures are not at the level that the executives are satisfied with.
The industry's disagreements over digital strategy emerged again yesterday when EMI announced it would start putting videos from some artists, starting with Norah Jones, on Hulu, the online video site backed by NBC Universal, News Corp and Walt Disney.
Hulu's first music industry deal comes as YouTube, Google's online video service, is planning to launch Vevo , a Universal Music-backed music video site, on December 8.
Universal has support from Sony Music, but is still in negotiations with EMI and Warner Music.
Once again it seems the industry is too greedy for itself. The current delivery methods to consumers are what have fueled the debate between consumers, labels, and content providers for a number of years, yet the artists continue to be left out in the cold.
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