Spotify, the European music service, launched in the US on 7/14 as a competitor to Pandora. The service offers free and paid options (without ads) of streaming of selected music from a range of major and independent record labels including Sony, EMI, Warner Music Group and Universal Music Group. It is also expected to close a deal with Warner Music Group by launch or soon after.
From the Spotify site: “The award-winning music service that’s taken Europe by storm has now come to U.S. shores. Millions of tracks ready to play instantly, on your computer and your phone. Any track, anywhere, any time and it’s free! Sign up for an invite now. We’ll send it to you as soon as we can.”
Of course, it also adds, “Don’t want to wait for an invitation? Jump the queue by signing up for Spotify Premium or Unlimited, starting at just $4.99/month.”
Spotify allows users to stream a limited number hours (only 20) of songs for free every month with the hope that users will eventually sign up to a paid subscription. Pandora’s model, while relying on advertising more than subscriptions, is similar – limiting free users to 40 hours free per month.
Spotify has more than 10 million registered users across Europe. It now competes in the US subscription services like Rhapsody and MOG, as well as Pandora.
Unlike Pandora, which serves up various artists it thinks users will like, via their genre- or artist-based stations, with Spotify they can pick specific songs or artists or albums, and listen to exactly what they want to listen to, similar to Rdio. However, not having a music discovery option like with Pandora may be a disadvantage.
Spotify also integrates with Facebook—this may eventually give the company a big leg up against Pandora. Users can sign in and you can see their Facebook friends who also are using Spotify, and see their recommended playlists, artists and songs. Users also have the option to publish their listening habits to your Facebook wall.
RBR-TVBR observation: We’re not sure how advertisers on music services like Spotify and Pandora feel about limiting listening to 20-40 hours per month, but in our opinion it just encourages users not to listen. Each time they’d think about listening, they know it would eat into their monthly “allotment.” Therefore, listening becomes a more “saved” event, rather than a regular event. As well, when a listener gets cut off in the middle of the month, they may just not come back. We’re pretty sure traditional radio stations and their unlimited streaming enjoy this development, as both Pandora and Spotify used to offer unlimited ad-supported listening.