Will Rhapsody catch-up with Spotify?

At a media launch in New York on Thursday, Spotify‘s leader Daniel Ek said the organization has now drawn 1 million US subscribers, getting up to the decade-old Rhapsody in just 16 months. The music streaming program has broadened its paying subscribers base from 4 million in July to 5 million in December or a quarter of the total 20 million active audience.

“We’re the largest subscription music service in the US, but the quickest growing one. We’ve achieved in one year what it really took others a 10 years to do,” said Ek referring to its rival Rhapsody, which was launched in December 2001.

Rhapsody might be the greatest running music subscription service in the US, but the company has built without any presence internationally so far. CEO John Irvine today told GigaOm that the streaming platform is going to be releasing in 16 European countries by the second quarter of this year, though he evidently didn’t reveal which specific nations are on the rollout list. It is the first significant expansion for Rhapsody, even though the company operates as Napster (which it acquired in 2011) through the UK and Germany. But if Rhapsody wishes to slow down Spotify’s momentum both at home and abroad, itwill have to continue distributing throughout the global map.

Based on Spotify‘s CEO total royalty payments bending in the last 75 % to $500 million (?ê311 million). In contrast music video service Vevo paid $200 million to labels and marketers, while US streaming radio service Pandora is looking to pay out $250 million (156 million). Some designers have complained that they earn much less from plays on Spotify when compared with purchases of CDs or iTunes downloads. Mr Ek addressed those concerns by stating the company pays out nearly 70 % of all the money it makes to rights holders, same as Apple’s App Store. Those are thin margins, it’s not fantastic. But we know that at scale it’s a fantastic model and it really works for us, he said.

In the conference Spotify revealed numerous upgrades to its providers, including an enhanced song recommendation system and a Follow tab which enables users to track the music choices of friends and celebrities. Based on the Swedish company’s managing director in New Zealand and Australia, Kate Vale, the upgrades were about “bringing artists and listeners closer together”.”Essentially it is really around discovery. Now you’ll manage to follow certain tastemakers, artists, and celebrities on Spotify,” she said.