Media Decoder: Spotify Cracks the Million-User Ceiling

Spotify, a streaming music service in Europe that is trying to enter the American market, has reached something of a milestone for digital music: a million paid subscribers.

Daniel Ek, one of its founders, announced the news in a company blog post on Tuesday. It is the biggest subscription base for any digital music service, and a quick jump from the 750,000 paid users the company said it had in December. (Rhapsody, the biggest comparable American company, has 750,000 paid users.) Spotify, which lets users listen to music for free or upgrade to an advertising-free version for about $15 a month, is available in seven European countries, and late last year said it had a total of 10 million users, counting both free and paid versions. Mr. Ek did not update that total, and a company spokesman also declined to provide the number.

Spotify is negotiating with the major record labels for distribution in the United States, and says it will come to the American market soon. But after announcing and then missing several arrival dates over the last two years, the company hasn’t stated any concrete plans.

In other digital music news, the British company Beyond Oblivion announced that it had raised $77 million from the News Corporation and the Wellcome Trust to help it begin operation around the world. The News Corporation, which owns MySpace, Dow Jones and the Fox network, among many other media properties, was an early investor in the service, which has an unusual business model: unlike other digital services, Beyond Oblivion wants to charge computer and mobile device manufacturers license fees to operate software to access a library of music in the cloud, but it will be free to consumers.

Jon Miller, the News Corporation’s chief digital officer, said in a statement, “Our additional investment in this business serves as an endorsement of the progress that Beyond Oblivion has made in bringing this innovative new music product to market.”

Beyond Oblivion’s deal is the latest in a string of investments in digital music over the last several months. Spotify is raising $100 million from private equity firms to help it come to the United States, according to reports in the news media that the company has not confirmed. And at least $57 million in venture capital has gone into music start-up companies since the end of 2010.


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