Spotify has been a pretty unmitigated success in Europe as our European readers can probably attest. The subscription model it has built is pretty compelling. For a (~$10) subscription fee, you have access to most of the popular music on earth through streaming channel. What’s more is that you can download playlists for offline listening. This all fits under a monthly fee model. But that’s not why Spotify is a success. You might be saying that Napster has been trying this for a few years (the legit version) so what gives Spotify an edge? Spotify’s success also hinges on a great interface and more importantly an ad-supported mode which people basically have access to the world’s music for free if they listen to a few ads.
Now you are probably thinking Pandora does this. But Spotify lets you pick your songs, whereas Pandora is more like a radio. There is already a huge testbed in Europe to show results one way or another. The fact that a deal still hasn’t been worked out is probably an indication of how Spotify is hurting downloads. Spotify has set a Dec 31st 2010 or bust deadline… Add to that Google is rumored to be readying a streaming music service in the very near future and you’ve got a tipping point for the music industry. The next few months will be telling in terms of which direction Internet music goes.
