Spotify Extends Access To External Sites

Spotify, the digital music service looking to raise funds at a valuation of up to $4bn, is pushing further beyond its own website to make the songs and albums it has licensed available to any blogger, news site or artist looking to use music online.

The Spotify Play Button, announced on Wednesday, is a widget that can be embedded in other websites in the same way as YouTube or Vimeo have made it easy for other sites to include video.

Companies signing up to use the feature include the Tumblr social blogging site, news brands from The Guardian to The Huffington Post, magazine titles from People to Time Out, and music and fan sites including NME, Rolling Stone and FanBridge.

David Karp, chief executive officer of Tumblr, described the ability for its users to include music on their blogs via Spotify as "revolutionary". Giles Cottle, principal analyst at Informa Telecoms & Media, described the launch as "a hugely important step" for Spotify.

Spotify, which is already closely integrated with Facebook, is not charging for the Spotify Play Button but will benefit if the strategy expands its reach and encourages new subscribers.

Charlie Hellman, director of product development, told the Financial Times that the Spotify Play Button would generate revenues for artists from sites that might otherwise have featured unlicensed music or no music at all.

"There was no simple utility which allowed people to take any track [or] any album in the world and put it on your website … in a style that fits your property," he said.

The company's growth prospects are being scrutinised as it engages in a new round of fundraising that people familiar with the discussions have said could raise hundreds of millions of dollars to expand beyond its 13 markets and could value Spotify at well over three times the $1.1bn price tag it attracted last summer.

The company has disclosed that it has about 3m subscribers, and is converting more than 20 per cent of its users from using a limited free service to paying for unlimited access. Fees to copyright holders remain a significant expense.

The music industry remains divided on Spotify, with many executives seeing it as the strongest competitor to Apple's iTunes download store but some artists are holding their music off for fear that its streaming business model will cannibalise more lucrative sales of full albums.

Spotify's announcement follows news late last year that it would open its platform to outside application developers, echoing similar moves by Apple and Facebook. Last month, Spotify extended free access for non-mobile users in the US, and lifted limits on the number of free tracks users in five European countries can access.

Music company executives said the extension could help Spotify avoid disrupting trends in its traffic as it talks to investors, but added that it would be difficult for Spotify to extend free access more widely without renegotiating contracts with rights holders.

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