March 12 (Bloomberg) -- Spotify Ltd., getting a jump on Internet radio leader Pandora Media Inc., is close to agreements with record labels to offer free online mobile radio outside the U.S., said three people with knowledge of the talks.
Spotify seeks to offer ad-supported mobile radio everywhere it operates starting in April, said the people, who sought anonymity because the plans aren’t public. The London-based company said it now offers a Web radio product to mobile users in the U.S. and desktop users in 20 countries.
The company is using free mobile radio to attract customers who may convert to its subscription music service, the world’s biggest. Mobile is key for both companies -- Pandora, for example, draws three-fourths of its audience on mobile devices and hasn’t expanded beyond the U.S., Australia and New Zealand.
Spotify’s markets include the U.S., U.K., Sweden, Germany, France and Australia, according to the company’s website. The service has 24 million active users and 6 million paying subscribers, 1 million more since December, the company said today, confirming an earlier Cnet report.
More than 90 percent of Spotify subscribers pay $10 a month for access to unlimited, commercial-free music on computers and mobile devices, according to the company. The rest choose a $5 a month version that’s accessible only on computers.
The company is seeking to add new territories in its talks with music publishers and record companies including Vivendi SA’s Universal Music and EMI Group, as well as Sony Corp.’s music business and Warner Music Group, the people said.
Graham James, a spokesman for Spotify, declined to comment.
Spotify and Pandora may face competition from services that Google Inc., Apple Inc. and Beats Electronics LLC plan to start this year.
Rdio Inc., the music streaming service created by billionaire Skype co-founder Janus Friis, will reach 24 countries after beginning service this week in Mexico, Ireland, Iceland, Italy, Latvia, Lithuania and Austria, the company said in an e-mailed statement.
Free Internet radio listeners on Spotify have limited control over song selection and hear advertising. Paying subscribers can create custom playlists and save tracks on devices.
Pandora, based in Oakland, California, gained 0.6 percent to $13.82 at the close in New York. The stock has climbed 51 percent this year.
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