(Image source: The Verge )

 

BY EVAN THOMAS

ANCHOR EMILY ALLEN

 

More music in more places: Spotify has entered a distribution deal with web portal Yahoo, with the eventual goal of bringing its music to all of Yahoo’s 700 million-strong audience.

 

It will embed Spotify’s existing play button feature on Yahoo’s pages. All Things Digital reports the service will only play music that users have already downloaded with Spotify’s software clients. This deal will reportedly include some sort of revenue sharing as well, but neither company provided details.

 

This move is similar to previous growth deals, says VentureBeat. Spotify does well when it partners with big web names .

 

“It’s built on a freemium business model, bringing in both advertising-based and subscription-based revenue. Since it’s primarily a social music service, it owes much of its growth to partners like Facebook.”

 

TechCrunch explains that’s the right model for Spotify: Get the eyes — or ears —  and then monetize them .

 

“The deal is also a win for Spotify, which has picked up 10 million early adopters and music enthusiasts, but now needs to focus on how to target the wider, mass market of users — Yahoo says that its 700 million reach is equivalent to half of the world’s internet population, so partnering with them is a good start for the Swedish startup to do just that.”

 

Yahoo gets an embeddable catalog of millions of songs out of this deal, and will create an app to push Yahoo-curated music content to Spotify users. But The Next Web says Spotify will benefit even more — it’s younger and smaller than Yahoo.

 

“Right now, we can’t help but feel that Spotify is getting the better deal. Reaching new users should be Spotify’s absolute top priority, and distribution deals such as these are its ticket to success.”

 

Spotify’s already in a good place. An anonymous source close to Spotify told Business Insider Spotify is the second largest source of revenue for record labels behind iTunes.

 

But the gap between the two services is still huge. Business Insider estimated iTunes paid some $3.2 billion in royalties last year. Spotify, meanwhile, has yet to even make a profit.

 

Spotify is live on Yahoo Music now, and it will spread to other areas of the site from there.