If you are not familiar with Spotify, you soon will be. I think I can say it best by Spotify::Pandora what Cell Phone::Pager. Spotify is an online music provider that connects your stationary and mobile devices to the giant online database of music available for online or offline listening on demand. This has been popular overseas but has quite recently completed its US debut. This is different from the Pandora model in that you can request specific songs/artists and create playlists vs the 'radio' model of providing a playlist based on keywords.
Marketing for the program has been somewhat underground in a series of invitation only memberships at first that have for the most part grown organically via Facebook and Twitter reposting then suggestion of friends via those outlets. The interface also pretty easily integrates with these social media tools using Facebook Connect (to show my other Facebook friends using Spotify, their playlists, share songs between us, etc) as well as retweeting or Facebook sharing and commenting on a song, album or artist via the desktop client or mobile app. This is even more apparent with the streaming updates involved in the new Facebook profile (to show the songs a user is listening to in real time and providing a scrolling list).
One of the reasons this is incredibly important is the ability to receive 'PAID' subscribers vs the non paid customers. For a limited time you can use the desktop client at no charge, but they bait you into buying the full service by restricting offline and mobile usage for only the paid customers...this is where they got me. Now I was a Pandora user for a LONG time, but somehow I was never even tempted to pay the 99 cents to be a paid customer. Does this make me a cheap person?? Well yes and no. While the advertising on Pandora was yes very annoying, the service itself was not worth it to me for the 99 cents even sans commercials. I became so frustrated as playlists became stale within days as the song rotation was nowhere near as deep as needed and time and time again I would want to listen to a particular song or listen to the same song again. I wanted CONTROL of the music vs being fed what they had.
Which brings me to my pager/cell phone comparison. Pandora's biggest sale was that you could control your radio service to play only the kind of music you liked (ie pagers biggest sale of being able to be contacted while still being mobile), but Spotify allows you to actual control all aspects of the music itself by being able to request specific songs, artists, playlists, genres and everything in between (ie in comes the cell phone that not only allows you to be contacted while being mobile but allowing you to actually communicate and respond to the contact).
It is probably for this reason that within the few months of the US release, they have already received over 400,000 PAID users at $10/month. I was happy to sign up for this even though it was 10 times the fee for Pandora. My reasoning, I buy more than 1 CD a month on iTunes for $10 so why not have ALL music for $10?
Which brings me to the drawbacks....first they need some serious help with the user interface, and I strongly suggest they make it easier for users to submit feedback! For the desktop client, it is certainly very dry looking and has some linear search issues that are a constant nag for me. The mobile app is worse because many of the playlists users have are several hundred songs long and are not searchable/sortable from within the playlist which is a huge oversight (this is certainly opening a space for competitors like Rdio with a sexier/American market application may gain headway).
But one of the biggest drawback... are they working from a bad business model to begin with? Similar to the Pandora model, as popularity for the music service grows so will the demands from the anemic music industry to capitalize on licensing fees. In the suit brought against Pandora for 'eleventy billion trillion gazillion dollars' (which did fail, but they have been successful in hiking the fees so drastically for Pandora that their profitability is pitiful at best considering their popularity), these industry moguls salivate over the potential earnings from licensing for music air time. Pandora must bump up the ad sales on their large number of non-paid users to bring in the money for licensing fees which in turn makes it a less pleasant experience for the listeners themselves (I personally got so tired of the same McDonalds ad over and over again that it made me search for an alternative service). I understand that I was a non paid user and the same reason that when I get water at a restaurant, they hand me the tiny cheap water cup...However, I am a believer that Pandora was in a perfect place to start adding in these features long ago with a HUGE client base already established, but they continued to stick to the same model vs trying to convert more non-paid to more paid using better offerings.
So will Spotify fall into the same trap? In my opinion, no. Spotify's model is based on paid users vs the other way around (they even imply in the fine print that the free service expires in roughly 6 months). I think this will encourage many people because of the services they are providing to make the switch to Spotify as their music resource. Where I believe this is brilliant...aside from my pre-spotify giant iTunes library (which all of your local files integrate with your Spotify libraries as well) all of the music that I have downloaded over the past few months has been via Spotify creating my library. In two months that consists of certainly a chunk of music, but imagine where that leaves me a year from now? Potential for hundreds of albums that require for me to keep up my Spotify account to retain them which will in turn encourage me to continue to pay the fee so I don't lose a years worth of music. Even if they don't remove the 'free' level service, it is unrealistic to have a music resource anymore that doesn't work in a mobile environment.
Curious if you agree...