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European music service Spotify finally makes it to United States, could rival iTunes

by Phil Hornshaw

It seems like forever that the Internet has been buzzing about Spotify, a European music streaming service, and how great it is. But for all that time, U.S. users have had to look on with envy and wonder.That ends today (kind of), with Spotify officially coming to the U.S. following the inking of a deal with Warner Music Group, according to a story from GigaOM. Warner was the last of the big record labels to make a deal with Spotify, with EMI Group, Sony Music Group and Universal Music Group all having signed on with the service recently.

With that hurdle out of the way, Spotify is clear to cross the ocean and bring its music streaming service to the U.S. It works a lot like some other streaming music services, except that rather than provide music in the vein of what a person chooses or in a radio-style format the way services such as Pandora do, Spotify streams music on-demand, and it does it for free, at least with its web-based service. There’s also an ad-free version that runs users $4.99 a month, and users can add unlimited, ad-less play on mobile devices for $9.99 a month. The premium service also throws in off-line play, which isn’t available to free customers.

In Europe, more than 1.6 million Spotify users choose to pay for the service, and Spotify reports that that’s about 15 percent of the total user base of 10 million. An app for Spotify appeared in the U.S. iTunes App Store today and one is also available in Google’s Android Market, but you’ll need to be an “unlimited” subscriber (with the $9.99 a month account) to access them.

Users who opt for the free account with Spotify can’t actually access the service yet; instead, you’ll have to wait for an invitation after signing up at Spotify.com. If you’re not interested in waiting, however, you can get access to the service now by signing up for a paid account.

If it’s tough to see what the big deal is, you might want to drop $5 and give Spotify a go. The service has been consistently raved about by just about everyone, including multiple big media outlets like Time Magazine and Wired Magazine. The biggest selling point is that it makes a huge library of music available all the time – as Wired wrote, it’s like having paid for every song on iTunes.

And when it comes to Spotify in the U.S., this might be a good time for Apple to start figuring out a good way to compete with its iTunes service. Rather than force users to purchase songs in albums or one at a time, Spotify makes all its music available to subscribers whenever they want for free, with a few ads. For $5, the cost of a premium cup of coffee or somewhere between three and five tracks on iTunes, Spotify users can access everything the service has to offer, and they don’t even have to listen to commercials.

The $10-a-month premium account for mobile access could slow down Spotify as it competes against Apple, especially with Apple’s entrenched user base that has been building for years with iPods, iPhones and iPads while the U.S. was waiting for Spotify. But something the European service has on its side is hype, and if it truly is as good as everyone has been saying, for what seems like years (I just downloaded my app and bought my subscription, so I can’t vouch for it yet), Apple may have to raise its game again to stay a dominant digital music distributor.