Spotify basically gave away shares to the world's largest record company. That's the secret behind how the music service was able to secure music rights from the music giants, writes swedish tech paper Computer Sweden.
Swedish music service Spotify has achieved something that no other streaming music service has managed. Agreements with the major music labels was in place already at the launch last fall. Something that gave Spotify a unique music catalog.
To secure music rights Spotify basically gave away a fifth of the shares to the major record labels Sony Music, Universal, EMI, Warner Brothers and the digital distributor Merlin writes Computer Sweden.
18 percent of Spotifys shares were sold to companies, for less than 100 000 SEK (14 000 USD). 18 percent of Spotifys shares were sold to companies, for less than 100 000 SEK. A very smal sum given that Spotify today valued at over two billion SEK (280 million dollars) . In exchange for the shares Spotify gained access to large parts of their music catalogs.
Next up is the launch of Spotifys application to the iPhone, if Apple approves, which in many ways are competing with Apple's own Itunes. Spotify will also be released to other mobile platforms like android and Symbian.
A launch in the U.S. are also in the works, Spotify has therefore brought in new capital from sources such as venture capitalists in Asia.