Spotify in the United States: New Music Service on the Rise

On July 14, 2011 Spotify arrived in America. With Spotify now within its shores, the music industry in the United States has a new competitor. Spotify is a music service that allows the user to select from a library of up to 15 million songs, and then create a personalized music library at no cost. Users can create playlists, search for artists, genres, albums, labels, almost anything! Users who upgrade to a premium or unlimited account, have access to even more exciting features.

Spotify, though just opening up in America, has been available in Europe since 2008. Right now Spotify invites are hard to come by, only a select few users who preregistered for the application before the release given access. Over the next few weeks though, Spotify invites will be sent out. According to CNN Money, Spotify CEO  Daniel Ek expects his company to have over 50 million users within its first year in America.

How does an application like this make money though? The free version is ad-supported. For a small monthly fee of $5 users will be able to listen to songs free of any advertising. Increase the monthly fee to $10 and songs can stream and store directly to a mobile device, much like an iTunes library. CEO Daniel Ek warns that the Spotify program is so addicting that once users try the free version, most will upgrade to a paid version.

The new Spotify is similar to Pandora. Although a personalized radio station is not created, users can find a favorite artist and based on that artist style, Spotify will suggest numerous other similar artists. Users then browse through each artist’s songs and decide which ones to add.

And even more so, as if all of these cool features weren’t enough, this new music service goes one step further. Facebook and Spotify are partnering. Now, any user registered with Spotify and Facebook can easily share songs with click and drop playlists. Facebook CEO Zuckerberg, along with other prominent people and companies have given their votes to Spotify. Zuckerberg is even quoted on Spotify’s website saying, “Spotify is so good!”  

What could this mean for music industry giants like Pandora and iTunes? Because iTunes requires upfront fees from users before songs can be downloaded and reviewed in a complete version, Spotify’s features may be even more appealing to the iTunes user. Pandora, which is very similar to the radio feature of Spotify, needs to watch out too. As Spotify gains customers in the US, not to mention its already huge customer base in Europe, Daniel Ek’s new Spotify is definitely a new and rising star in the music industry.

Author: Liza Rutledge