San Francisco – Spotify, the European streaming music
service that is in talks with the major record labels in preparation to launch
in the U.S., is facing obstacles that include Apple (NASD: AAPL) executives actively
discouraging the labels from backing its business model, CNET News.com
reported, citing music industry sources. Apple executives reportedly told label
executives in recent meetings in Los Angeles they had "serious
doubts" that Spotify’s business model — a main, free service supported by
ads combined with an ad-free, monthly subscription service — "could ever
generate significant revenues or profits," according to CNET’s sources.
The Apple executives also reportedly noted that "it’s tough to sell
something that some else is giving away," pointing to potential declines
in download sales should U.S. consumers embrace Spotify.
Meanwhile, both Apple
and Google (NASD: GOOG) are reported to be working on new music services. Apple is said to
be working on a cloud-based service that would let users store their iTunes
music libraries online and stream them from connected devices.
Less is know
about the particulars of Google’s planned music service, but sources told CNET that
Google may miss a planned launch before year’s end, and opt to launch in the
first quarter of 2011.