Spotify store launch to hit 7digital hard

The announcements earlier in the week by Spotify of its own music download store looks set to end the Swedish company’s relationship with 7digital.

Until now all track purchases on Spotify have been powered by the music download store which is half owned by HMV parent Waterstones.

Forrester Research vice president Mark Mulligan said, as reported in the Telegraph, that while the end of this partnership would hit 7digital hard it would not sound its death knell.

“The end of 7digital’s relationship with Spotify will be a blow and will hurt it in terms of high profile access to customers,” he said. “It will be disappointing and mean the loss of guaranteed bankable revenue. HMV will not be happy. However, HMV have staked their digital figure on 7digital and know that the market for digital downloads, outside of iTunes, is very small and that the future of digital music revenues is not about download sales, so it will continue to invest in 7digital.”

7digital chief executive Ben Drury meanwhile is reported as having said the move by Spotify’s was “further evidence that the iTunes monopoly is being broken”.

He played down the impact the split on his own business however, saying: “It was an obvious step for Spotify given the restriction of the new five lifetime plays per track and shows that the freemium model alone is unsustainable. It's also certainly linked to their forthcoming US launch, which we now expect imminently.

“7digital is not powering the new download offering from Spotify. There will be a minimal impact on 7digital, as we continue to focus on expanding our offering to new customers who want access to music anywhere, anytime, on mobile and connected devices.”

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