Spotify Event Tries to Bury the Old Feuds Between Artists and Napster

Spencer Platt/Getty Images At a Spotify event in New York Thursday, Lars Ulrich, right, the drummer for Metallica, buried the hatchet with Sean Parker, an investor in Spotify, who was a co-founder of Napster.

Could a single bro-hug symbolize healing for the music industry after a decade of digital strife?

That was the inevitable question at a Spotify news conference on Thursday, when Lars Ulrich of Metallica embraced Sean Parker, one of the company's investors. Back in 1999, Mr. Parker became an instant bogeyman for the music business as a co-founder of Napster, the file-sharing system that helped usher in an era of destabilization that the the industry is still recovering from. (He is also a former president of Facebook, as portrayed by Justin Timberlake in the movie “The Social Network.”)

Metallica sued Napster in 2000, and by 2002 the service had collapsed under the weight of copyright-infringement litigation from the major record companies. On Thursday, however, as Spotify announced that it had made a deal with Metallica finally adding the band's music to its service, the two men publicly made peace, insisting that their earlier encounter had been “misunderstood.”

“This was never about money,” Mr. Ulrich said. “It was just about control.”

Last week, Metallica took possession of its recordings after nearly three decades with the Warner Music Group. Daniel Ek, Spotify's co-founder, said the deal was cut with the band's own new label, Blackened Recordings.

Spotify, which began in Sweden in 2008 and arrived in the United States a year and a half ago, has become one of the fastest-growing forces in digital music. For many in the industry, Spotify has come to represent the future, as consumer behavior evolves.

The company's news conference, which featured a performance by the R & B singer Frank Ocean, was suffused with Spotify's now-familiar level of tech glamour. It was held at a modern dance company's studio in Chelsea, with phalanxes of waiters serving treats like gourmet hamburgers and tiny grilled cheese sandwiches.

Last month, Spotify raised $100 million in new investment from Goldman Sachs and others at a valuation $3 billion, a sum that seemed both to validate the company and raise questions about whether it could live up to the hype.

At the conference, Mr. Ek, Spotify's co-founder and public face, updated its impressive user statistics and introduced a slew of new features.

Spotify now has 20 million users around the world, Mr. Ek said, with five million of them paying a monthly subscription fee. (Users of the free version must listen to advertising, but for $5 to $10 a month, listeners can eliminate those ads and get various other perks.) For the first time, Spotify gave specific information about the American market, saying it has one million paying users here.

The new features for Spotify include a more colorful home screen that constantly feeds its users recommendations for music based on their tastes. Local tour dates also pop up, along with some strikingly personal recommendations. “Do you remember this song from Kris Kross when you were 9?” was one example during the 29-year-old Mr. Ek's demonstration. (The song was 1992's inescapable “Jump.”)

The changes, Mr. Ek said, are meant “to bring the most relevant content to you in a useful way, with helpful context.”

Despite Metallica's change of heart, Spotify still has far to go to convince artists and record labels that it can provide substantial royalties. Mr. Ek said that Spotify had so far paid $500 million to “rights holders,” which generally refers to record companies and music publishers, who in turn pay artists. That sum, Mr. Ek said, has doubled over the last nine months.

Daniel Glass, the founder of the label Glassnote, whose artists include Mumford & Sons, said that Spotify usage did not cannibalize record sales for his artists. But the service still has many gaps, from acts big and small. Rihanna, for example, has withheld her latest album, “Unapologetic,” from Spotify.

And at the conference Mr. Ulrich sported a T-shirt for Budgie, a British metal band from the 1970s and '80s that was an influence on Metallica. Its albums are nowhere to be found on Spotify.

Ben Sisario writes about the music industry. Follow @sisario on Twitter.