Spotify shareholder says U.S. launch very close

PARIS Wed May 25, 2011 4:12pm BST

Founders Fund Managing Partner Sean Parker attends the eG8 forum in Paris May 25, 2011. REUTERS/Gonzalo Fuentes

Founders Fund Managing Partner Sean Parker attends the eG8 forum in Paris May 25, 2011.

Credit: Reuters/Gonzalo Fuentes

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PARIS (Reuters) - Internet entrepreneur Sean Parker said the U.S. debut of European music streaming site Spotify was very close and he hoped it would happen some time this summer.

Parker, best known for co-founding the file-sharing service Napster that dealt a major blow to the traditional music industry's business model, casts Spotify as a way to get people to pay for music again.

The benefit to the industry would come via monthly subscriptions for premium access to streaming websites or from buying CDs or downloads of the music they discover and assemble on sites like Spotify.

"I wouldn't say Spotify is about atoning for Napster," he told Reuters in an interview on the sidelines of the e-G8 Internet forum in Paris on Wednesday. "It's more about finishing what I started."

Parker is on the board of Spotify and owns an undisclosed stake in the company.

Companies like Spotify, and its cousins Pandora and Rhapsody in the United States and Deezer in France, sign licensing deals with music labels for the rights to allow users to listen to songs for free without downloading them on their computers or mobiles.

They then charge monthly fees for premium access where users can take their music with them on their mobiles and iPods and do not have to listen to advertising between songs.

To date, Spotify has roughly 1 million paying users in Britain, Sweden, Finland, Norway, Spain, France and the Netherlands and more than 10 million on the free service.

Founder Daniel Ek has been saying for more than a year that a U.S. expansion was on the cards, but problems signing licensing deals with labels have slowed the launch.

"It's very close," said Parker. "I'm more optimistic than at any other point."

Pressure is mounting as giants like Apple (AAPL.O) are close to launching an online music storage and streaming service after reaching deals with major labels.

Parker hinted that the company was close to resolving issues it had with music labels and was seeking to sign licences that would cover entire regions rather than individual countries.

"We are not talking about standard commercial deals," he said.

Separately, Parker, who was also an early adviser and is a current shareholder in Facebook, said he had no idea when the social network would seek to go public in the United States.

He said the decision lay with Facebook founder Mark Zuckerberg. "Mark will decide when he thinks it makes sense, but there is no pressure to do so," Parker said.

A flourishing secondary market has grown up in recent years where investors seeking to surf on the rise of private Internet start-ups have pumped money into companies like Facebook and social gaming site Zynga.

That has sent valuations soaring - some put Facebook's at anywhere between $50 and $100 billion - and is also allowing the founders of start-ups to stay private longer while still growing rapidly.

"There is so much interest on the secondary market that Facebook does not have a problem of liquidity," he said.

Some analysts predict a 2012 flotation for Facebook amid intense investor interest in Internet initial public offerings. Facebook's Chief Operating Officer Sheryl Sandberg told Reuters in an interview last week that an IPO was "inevitable.

Parker added: "If Facebook is worth $80 or $100 or $120 billion, it's almost academic at this point. This is really quickly growing into one of the biggest companies ever."

(Additional reporting by Matt Cowan; Editing by David Cowell)