Get money, get paid? Yahoo signs distribution deal with Spotify

Yahoo has reached an agreement with Spotify that will put the streaming music service in front of its 700 million global users, the web portal announced today.

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Spotify is the ultra-popular music service that lets people share their song library with others and discover new music. 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.

In an effort to grow its user beyond the walled-garden that Zuckerberg built, Spotify launched a “play button” feature allowing users to embed the Spotify player into websites back in April.  Its new Yahoo distribution deal means that play button feature will get taken advantage of. The deal itself is similar to Spotify’s distribution deal on Facebook: It will only play songs that have already been downloaded and opened using Spotify’s software. Obviously, the added presence on Yahoo’s web portal is likely to bring new users to Spotify.

Spotify will initially roll out to Yahoo! Music and will be eventually integrated across the rest of Yahoo properties. In return, Yahoo will create an app for Spotify’s platform.

For Yahoo, the distribution deal represents a way for it to generate new revenue. Yahoo will get a cut of every new paid subscriber it brings to the streaming service, according to AllThingsD. Yahoo didn’t go into detail about how much it would receive for new subscribers, but it did state that neither company would be sharing revenue from advertising.