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Spotify’s download store delivers ‘blow’ to 7digital

Spotify’s launch of its own download service will be a blow to former partner 7digital, say analysts.


It is believed Spotify is planning to use the fresh financing to help it crack the north American market

Earlier this week, the popular Swedish music streaming service announced iPod syncing, mobile access for its free users and the launch of its music download store.

The creation of its own store marks the end of Spotify’s relationship with 7digital, the music download store half owned by Waterstones (the parent company of HMV), which has until now, powered all track purchases via Spotify.

Mark Mulligan, vice president and research director at Forrester Research, said that the end of the partnership would be a blow to the company, but had not sounded its death knell. “The end of 7digital’s relationship with Spotify will be a blow and will hurt it in terms of high profile access to customers,” he explained. “It will be disappointing and mean the loss of guaranteed bankable revenue. HMV will not be happy. However, HMV have staked their digital figure on 7digital and know that the market for digital downloads, outside of iTunes, is very small and that the future of digital music revenues is not about download sales, so it will continue to invest in 7digital.”

Mulligan said that 7digital would instead be focusing on powering other company’s download services and providing its catalogue and functionality across a range of smart devices.

Ben Drury, chief executive of 7digital said Spotify’s decision was “further evidence that the iTunes monopoly is being broken” and played down the impact the split from its most high profile partner will have on its core business.

“It was an obvious step for Spotify given the restriction of the new five lifetime plays per track and shows that the freemium model alone is unsustainable,” he explained. “It’s also certainly linked to their forthcoming US launch, which we now expect imminently.

“7digital is not powering the new download offering from Spotify. There will be a minimal impact on 7digital, as we continue to focus on expanding our offering to new customers who want access to music anywhere, anytime, on mobile and connected devices.”

He added: “Importantly, customers who have previously purchased tracks from 7digital via the Spotify application will have full access to their tracks through, our mobile site and via our mobile apps for Android and BlackBerry. Previously purchased tracks and albums can be downloaded directly from via a user’s Digital Locker.”

At the start of this week 7digital updated its Android app, adding an MP3 download store, allowing users access, previews and purchase tracks from 7digital’s 14 million strong catalogue.

Filed in: Technology News

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