Should Spotify Launch Without All The Majors?


The latest rumor – just a rumor – about Spotify has the company considering a U.S. launch without one or more of the four major record labels. The end of 2010 is just one month away, and Spotify executives have said numerous times they expect to debut in the U.S. by the end of the year. Certainly one way to meet that goal would be to take whatever licensing deals have been negotiated and get the product to market as soon as possible.

Since companies get only one chance to make a first impression, launching without one or more of the majors would be a risky move. Take either Universal Music Group or Sony Music out of the picture and Spotify would be without titles that account for more than 25% of U.S. market share. Warner Music Group accounts for about 20% of U.S. sales and would be sorely missed. Forging ahead without EMI would mean about 10% of U.S. market share would be missing.

If Spotify launches without a major, it will find the size of its catalog doesn’t matter until it matters. That is to say a service may have 10 million tracks, but the size of the catalog isn’t as important as its hit rate. People expect services to have just about everything they want to hear. They want services like Spotify to closely replicate their personal music collections. If users run across holes in the catalog with any frequency, they will become frustrated with the service. Some will turn away and be difficult to get back.

What’s more important: an arbitrary deadline or creating the best possible product? Considering the way early adopters, bloggers and reporters tend to put extra effort into finding faults with over-hyped Internet startups, the answer should be obvious. If Spotify wants to do the right thing for its U.S. launch, it will not launch without a full, robust catalog when it chooses to launch. (The Guardian)