Spotify U.S. Launch: Revolutionary or Just Another Music Streaming Service?

July 15, 2011— -- Spotify, a Swedish online music-on-demand service, has an impressive group of followers, including Mark Zuckerberg and 10 million European subscribers.

For years, American tech aficionados have been clamoring for its arrival in the U.S., and on Thursday they got their wish. Warner Music Group teamed up with Spotify to launch the site in the U.S., allowing its users to stream any music they want from its library of 15 million songs.

The site has a combination of services you can pay for in order to keep your music ad free, and free services, which you need to be invited to and are ad supported. Requesting the free service is as easy as entering your email address on their website.

Americans buzzed about Spotify across social networking sites.

Celebrity Ashton Kutcher tweeted "What a relief, now that it's legal in the US, I can finally come out of the closet about my #Spotify addiction." YouTube video blogger Philip DeFranco tweeted: "Only played with it for the past 10 minutes but I think Spotify may be the future of music."

Spotify Arrives in the U.S.

So is Spotify the future of music? It is being hailed as the 21st century solution to our music listening needs. What is the big deal behind Spotify?

"Any song, any time, anywhere," said Joe Brown, editor-in-chief of tech blog Gizmodo. "As lives are increasingly interconnected, it becomes more and more unrealistic to store your music on a specific device. Spotify represents today's demands of music listening."

Available to all users, Spotify's catalog of 15 million songs is unmatched by the iTunes store's eight million tracks and any other music streaming services.

Additionally, if you want to listen to something that isn't in its catalog, you can seamlessly integrate your music on the local hard-drive to the Spotify library. Essentially, it can replace your current existing music library such as iTunes. Spotify allows its users to select what they want to listen to, whenever, beginning a song in 200 milliseconds.

Unlike some of its competitors, Spotify is an on-demand service.

But all good things come with a price. Spotify users only have access to the "anywhere" feature that makes Spotify truly exceptional with a monthly subscription fee.

With the Unlimited package option, a user can not only access Spotify's extensive catalog on the go, but also cache songs on a mobile device without Internet. Gizmodo's Brown clarifies that while other services such as Rdio offer that offline cache ability, Spotify one-ups them in speed and effectiveness.

In the digital music industry where revenues (which includes music sales downloaded from iTunes, subscription and streaming services) jumped from $1.9 billion in 2006 to a whopping $5.7 billion in 2011, Spotify has many competitors. That means that as effective as Spotify is, it lacks some aspects that its competitors have mastered. "People who want to use its radio function might be disappointed," predicts Glenn Peoples, a reporter for Billboard.com. Features like radio and sharing aspects of Spotify may not be as advanced as its competitors. Another predictable difficulty Peoples foresees is Spotify's organization of its catalog—it's built around playlists and may be a change for people accustomed to cataloging their music by album.

Despite these difficulties, critics emphasize that Spotify isn't meant to specialize in these features and seem confident that it will revolutionize the music industry. "I think Spotify will reinvigorate consumer's interest in digital music," says Billboard's Peoples.

Spotify Makes Its American Debut

For Gizmodo's Brown, Spotify is a response to the change in existing listening habits and the move into streaming music services will be a natural progression to U.S. consumers who find themselves increasingly online.

"One hundred twenty bucks a year, you never have to buy an album again," says Brown. That amount would buy approximately 93 songs on iTunes. But to an American consumer, this price may still be expensive when many piracy options exist. In a 2006 survey conducted by the Associated Press and Rolling Stone, 19 percent of American adult music listeners felt the then 99 cents per digital download of a song (now $1.29) was too expensive while 52 percent felt it was fair. How will they feel about a $4.99-$9.99 per month subscription plan? Ultimately, the success of Spotify in the U.S. will depend on the American consumers and whether they believe the price is right.

"Americans have had a bad history with free, on-demand services. From Spiralfrog to MySpace Music, these services have been disappointing and have truly lived up to the adage 'you get what you pay for,'" affirms Peoples. "Spotify is the first free, on-demand service that is truly a great service."

Spotify's three service options are: Premium (unlimited web streaming with no advertisements; $4.99/mo), unlimited (Premium with mobile access and offline mode for playlists;$9.99) and free (ad-supported, free streaming on the web). For now, those who want a free service option need an invitation, which they can request by entering their email address on Spotify's website.