See Spotify Run (This Year)

By Niraj Chokshi

Spotify, the Swedish music-streaming service sometimes described as the savior of the music industry and a potential threat to Apple's iTunes Store, will launch in the U.S. this year, the CEO promised this week.

It had been rumored that Spotify CEO Daniel Ek, himself sometimes compared to Apple CEO Steve Jobs, would make the announcement during a keynote speech yesterday at the South By Southwest (SXSW) music festival. Instead he stressed the importance of building "the best product that we can" ahead of any launch and listed to the legal and licensing hurdles the company needs to overcome.

Spotify lets users listen to any song in its library for free, with occasional display and audio ads that can be avoided by paying a monthly subscription fee (£9.99/a month in the U.K.). Just as importantly, the program also lets you save playlists of songs for off-line listening.

But Spotify isn't alone. Rhapsody and Napster already offer similar services in the U.S. (Rhapsody is adding a Spotify-like feature to its iPhone application that will allow users to listen to music offline.) And Ek expects Apple will follow suit and move music into "the cloud" by streaming it for users rather than allowing them to download it. (It has already been rumored that such a service would be called iTunes Replay.)

So what makes Spotify stand out? The service has wooed fans with its simple design and focus on playlist creation and sharing and is considered to be one of the few online music businesses with a viable business plan. "The best part about Spotify is that it could not be easier to use," LifeHacker's Adam Pash wrote last summer.

While Ek was vague in his speech, some are reading between the lines to predict a launch date. During the presentation, Ek showed the Spotify application on the forthcoming Sony X10 smart phone running the Google Android operating system. Because the phone will be released in a few months, PC World's Mark Sullivan suspects the same will be true of Spotify.

Spotify has 7 million users in Sweden, Norway, Finland, the UK, France and Spain. About 320,000 users (or 4.5%) pay to opt out of the service's ads.

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http://www.theatlantic.com/business/archive/2010/03/see-spotify-run-this-year/37650/