Spotify to take on Apple in US, China?

Much-vaunted streaming music service today confirmed plans to open for business in China, even as Apple struggles to finalise a local deal there with China Unicom to sell the iPhone in that country.

Spotify’s Oriental ambition means working with local operator, the Tom Group, which has partnered with Spotfiy, and will bring the European ad-supported streaming music service to China, Reuters reports. The localized Chinese version will be available both online and via mobile. Spotify is also expected to launch its service in the U.S. in the coming months.

Spotify recently attracted investment from Li Ka-Shing, an Asian investor who was part of a group which provided £30 million in financing for the company earlier this month. Spotify will compete with other free streaming music services that operate in China.

Principal analyst at BDA, Liu Ning told Brand Republic: “Many local websites are already providing the same free services in China for online music streaming. I don’t expect Spotify to be popular in China, as Chinese people are not familiar with this website. It will depend on Spotify’s business models”.

In related news, leading aggregator The Orchard has inked a deal with China Telecom, releasing its catalogue through the carrier’s music service, to be dubbed, iMusic.

Sony BMG, Universal Music, Warner Music, EMI and Merlin (the body which represents Europe’s independent labels all own shares in Spotify, shares the company offered the labels for an aggregate €8.8 million – presumably as part of the negotiation to secure permission to stream their music online. Together, the labels own 18 per cent of Spotify. Sony BMG took the lion’s share, now owning 5.8 per cent of the service.

There’s strong rumours the labels hope to use SPotify to partially destabilise Apple’s current digital music market dominance. It’s a tripartite strategy, however, as the company also has an iPhone application pending review by the notably Byzantine App Store approval team.

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