Spotify signs TeliaSonera for mobile music, but questions raised

Having started its ‘free' music service only 12 months ago, Spotify has unveiled a milestone deal with TeliaSonera that will enable the telco's subscribers to access the music service using their PCs, TVs or mobile phones. Spotify said that the two-year contract would see TeliaSonera launch a specific mobile phone (said to be under development by INQ) within the next few months to support the Spotify service.

"I can say that we are really glad to work with Spotify. The main idea of this deal is that we found a service that meets our customers' demands," said Stefan Trampus, TeliaSonera's head of broadband services in Sweden. However, Trampus also admitted that the service should also attract new customers as well as acting on building subscriber loyalty.

Currently, the Spotify application runs on the iPhone, Android and Symbian S60 platforms, and generates around a third of all digital music sales in Sweden. Around 5.5 million people worldwide currently use the music service, according to TeliaSonera.

However, a war-of-words has broken out following a plea by Spotify's CEO, Daniel Ek, claiming that the music industry had to fundamentally change the way it charged for tracks. Ek has called for music labels to stop the practice whereby Spotify had to pay them a fee every time a track was played. Instead, he said the future lay in a system where money was made through different routes, such as music downloads, advertising, merchandise and tickets to live events.

While Spotify's catalogue is fast approaching the size of Apple's iTunes, Dan Nash, a senior executive at Napster, has responded by asking where will Spotify be a year from now with its free service? "All these ad-supported models have burned out already; why is Spotify going to be any different?"

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