Swedish Music Service Launching In U.S. (No, Not That One)

While many continue fretting over whether and when Spotify will open up Stateside, another digital music company from Sweden is going ahead there – and may even become a beachhead for its better-known compatriot.

X5 Music Group, which licenses music rights for re-sale through digital retailers like Spotify and iTunes themselves, has raised €7 ($9.16/£5.91) million to open up shop in America.

The money comes from Northzone Ventures, a Spotify investor which claims to be “Spotify’s principal owner.”. The first word in X5’s press announcement?: “Spotify.”

It continues: “The new funding will first and foremost be used to facilitate signing of American artists and to increase X5 Music’s current catalogue.” X5 is taking an office in the Empire State Building.

Says X5 CEO Johan Lagerlof: “With Northzone’s strengths and front edge competence within the streaming music department, we can now truly be the best alternative for major American artists.”

“Front edge streaming music competence?” Could he be talking about Spotify itself? Venture investors often have their portfolio companies assist each other, and signing American artists is exactly what Spotify needs. With its U.S. struggle apparently due to major labels’ reluctance to license a free unlimited service, Spotify could perhaps use an X5-shaped helper in its negotiations…

X5’s catalogue is mostly second-division and archive fare, though at least this would be something should Spotify opt to launch without U.S. majors.

X5 already licenses tracks to Spotify, as well as to all the other main digital music providers, so any new licenses X5 wins in New York could benefit Spotify’s rivals as well as Spotify.

Gaining music distribution licenses is complex and painful in any country. Spotify says: “The American music market is the biggest and most complex in the world. It took us 18 months before we were able to launch in Europe, it’s taken us longer than expected in the U.S. but we’re working hard to ensure we launch with the best service possible.”

Northzone specialises in taking Nordic internet companies in to bigger world markets.