$100 million funding round
Music streaming site Spotify announced this week that it has achieved one million paying subscribers, making it the largest service of its kind in the world.
Spotify was launched in October 2008 by Swedish startup Spotify AB, offering free music streaming with advertisement breaks or the option of paying for an account with no advertising and enhanced features. The recent announcement states that the one million paying subscribers make up 15 per cent of its current active users, with nearly seven million still using the service for free. The company is said to be currently in the process of a $100 million (£61.8 million) funding round, which values the business at $1 billion.
It is expected that the money will be used to fund a long-anticipated expansion to offer the service in America. There are already some established streaming sites in the US, such as Rhapsody, which currently has 750,000 paying customers, but the biggest challenge will likely come from Apple and Google, both of whom are expected to launch cloud-based streaming services in 2011.
Only the beginning
Spotify is currently only available in selected areas of Europe, with the free service limited to France, Spain, Sweden, Norway, Finland, Netherlands and the UK. The massive US market is an obvious next move but, despite its recent milestones, the website is still a loss-making venture