In unlimited music race, Rdio has beaten Spotify to US launch

Despite trying for over a year, Spotify has been beaten to US launch by Rdio, the comparable online music start-up backed by Atomico Ventures’ Niklas Zennstrom and Janus Friis, who earlier in their careers founded Skype and Kazaa.

Rdio on Tuesday switched off its beta service and went public in the US and Canada only, offering unlimited web streaming for $4.99 a month or additional Android, iPhone and BlackBerry access for $9.99 a month – a similar pricepoint at which Spotify and comparable services operate elsewhere.

Photo by CarbonNYC on Flickr. Some rights reserved

Billboard last week reported Spotify, which most recently has targeted end of 2010 for US launch, is “back to square one” on the idea and “has approached the labels with a clean slate to determine what type of service would be possible”. Spotify’s chief executive Daniel Ek is philosophical, last week tweeting: “Life is not perfect. Sometimes it ain’t even good. But it is what you make it to be.”

But Billboard never asked Spotify and has since updated its story with Spotify’s recently-appointed US managing director Kenneth Parks commenting: “We are in fact in a good place with our label negotiations. We’re confident in our US launch later this year.”

Now Billboard says: “Sources say Spotify has almost completed deals with some of the major labels.” And it says some of the assertions in its original story are “unclear”.

Whatever the case, it’s clear that the unlimited digital music subscription space is hotting up, with many entrants all vying to pick up recurring monthly custom as a la carte purchases wane…

Spotify still stands to own a major slice of this market (it already has over 500,000 paying customers), but the longer its US debut waits, and the longer it goes without signing crucial carriage partners, the more chance the likes of Rdio have of gaining a foothold.

Where Spotify requires an app for PC play and is trying to manage the bandwidth demands of its ad-supported free service, which it is now trying to limit, Rdio eschews free streaming in favour of a subscription-only service

Though US label divisions, particularly Warner Bros Records, have expressed reluctance to license free services like Spotify’s, pay-for Rdio boasts US licenses from the four majors plus a selection of indies.

Spotify and Rdio are pretty close on feature set – collaborative playlists, offline cacheing, Pandora-style “artist radio”, iTunes migration, pay-for track downloads. But Rdio, whose presentation is slick and simple, goes harder on social discovery.

Update: Though Rdio says it’s signed “partnerships with major independent music aggregators including IODA, IRIS, Finetunes, INgrooves and The Orchard”, Merlin, the self-appointed “fifth major” representing indie labels with 10% of US market share and the same proportion of Spotify plays, says Rdio has not got a license for those indies’ repertoire, and so isn’t carrying many big indie artists…

Merlin chief executive Charles Caldas: “It is incredibly disappointing that Rdio have launched their new service across North America without having finalised a deal for the world’s most important independent labels and artists.

“We are surprised that a service, whose success would seem dependent on offering its consumers a comprehensive choice of repertoire, would launch without giving those consumers access to the leading global independent labels we represent, and their artists.”

Read The Celestial Jukebox: Who’s Who In The New Music Goldrush – we compare and contrast the unlimited-music contenders…