the Informer

Spotify, an Internet music streaming service, may finally be coming to the United States’ shores later this year. Three weeks ago there was dismay at South By Southwest Interactive (SXSWi) when Spotify’s creator, Daniel Ek, didn’t reveal a release date. It had been assumed by many that he would use the SXSWi platform to launch the incredibly popular service in the United States as Twitter and Foursquare had done in previous years, but that announcement never came.

Last week though, Senior Vice President Paul Brown finally revealed in an interview with Bloomberg that Spotify “aims to start U.S. operations in the third quarter” of this year. The launch would be associated with the release of a number of mobile applications—for the iPhone and BlackBerry etc—for streaming Spotify on the go. And Spotify was beginning to build its mobile and server capacity in the United States to support its launch.

This is great news if you know exactly what Spotify is. For those that don’t, Spotify is an English (and technically Swedish) based company with seven million users across Europe. Utilizing a Peer-to-Peer (P2P) technology, Spotify allows users to stream single songs or entire albums instantaneously, connecting the user to a collection of 10 million tracks. Free accounts are supported by advertisements, while paid accounts have no advertisements and come in two varieties, daily and monthly passes. Of the data use of Spotify, Ek said, “we’re consuming more capacity than Sweden has as a country.” This is a staggering statistic, but one that would be much larger if not for the aforementioned P2P technology. Despite the negative connotations of P2P, this service is completely legal and completely free and is downloadable as a small iTunes-like application.

Originally billed as the iTunes killer, Spotify could never replace the music juggernaut. But it could make a considerable dent. The barriers for entry into the United States are some 500 separate publishers who would have to agree to have their music shared and heard on the service. Operating at a smaller income compared to iTunes. Loss of revenue is on the front of many of these publishers’ minds, as CD sales steadily decline across the country. Though as European usage statistics state, 30 percent of all play lists on the service are entire albums offering a glimmer of hope for the dated format.

A move to America would mean a much larger audience for Spotify compared to the current potential market of 170 million solely in Europe. This could mean more revenue from a country that is more willing to spend money for good content (a la Pandora premium). The move could also bring changes to the service, specifically to appease the big publisher’s wishes. These changes have not been settled or announced, but one would hope the service remains true to the model that has faired so well on the other side of the Atlantic.

Regardless of possible changes, the launch of Spotify will be a good thing. Specifically it will mean instant access to the music you want to hear. Beyond that it will mean the proliferation of new music, the possible resurrection of the album, and a gigantic library of music right at your fingertips.