Spotify prepares German launch for its music platform
- 13 March 2012
- From the section Technology
Spotify, the London-based music streaming service, is to launch in Germany on Tuesday.
The subscription business already operates in the UK, US, France and nine other countries, but this marks its first entry into Europe's biggest economy.
Earlier this year Spotify's rival, Grooveshark, pulled out of Germany, blaming high licensing costs.
Spotify said it did not comment on its commercial relationships.
Chris Cooke, business editor of the music industry newspaper CMU Daily, said that the German royalty collection agency Gema was probably responsible for the fact that it had taken Spotify until now to make the move.
"Representing Germany's songwriters and publishers, Gema is renowned for being the toughest of the royalty collecting agencies," he said.
"Spotify was discussed at theReeperbahn music conference in Hamburg in 2010, and Gema's representative in that debate, Alexander Wolf, was pretty blunt when talking about the streaming service, saying he couldn't see it ever being licensed in Germany without a change in its business model.
"Since then Spotify has altered its priorities somewhat to put more emphasis on paid subscriptions, and we've heard that some of the major music companies - which have equity in Spotify via their labels, and through their music publishing companies are also stakeholders in Gema - have been putting pressure on the royalty body to change its stance."
A spokeswoman for Gema said she could not provide a response at this time.
Spotify said it now has more than 10 million active users, three million of whom pay for its service to override time limit restrictions and remove adverts.
"It's the third largest music market in the world and is a very important market," Jeff Levick, the firm's chief sales officer told the BBC.
"We took it very seriously and had wanted to make sure that when we did launch in Germany it was the right time with the right product as well."
Mr Levick said the firm had added new German language albums to its library ahead of the move, bolstering its size to 16 million tracks. Users in other markets will also have access to the new songs.
The launch is the company's first since unveiling its app store in November. Local partners include the German edition of Interview magazine and the festival guide Eventim.
Users will face the same 9.99 euro ($13.10; £8.40) monthly fee for the business's premium service that is charged elsewhere in the EU.
Despite Grooveshark's exit Spotify will face local competition.
Cologne-based Simfy says it already has more than a total of two million users in Germany, Austria, Belgium and Switzerland. Its chief executive said he welcomed the extra competition.
"Spotify's upcoming launch in Germany has been a topic for a long time now and we are happy to have one more contender here spreading the word," said Gerrit Schumann.
"More and more people will consider music streaming and look at the available options, and that's how the market will really take off."
International rivals Rdio and Deezer also launched in Germany over the 12 months.