The music industry has changed dramatically over the past decade, and it’s about to undergo another cosmic shift with the arrival of Spotify in the U.S. Originally based in Europe, Spotify launched earlier this month and already boasts more than 1.5 million subscribers.
Spotify is a music streaming service that allows users to access a seemingly endless music library and play songs on their computers, phones or home audio systems. Currently, Spotify offers three tiers of service: a free, limited monthly streaming membership (by invitation only), and two pay plans that offer an ad-free listening experience and offline usability.
To build an American market Spotify partnered with Klout, the online reputation service, to offer influential social media users a chance to try Spotify for free. Demand for invitations was so strong that the Klout website briefly crashed, an indication that there is a strong interest in this music streaming service.
Spotify also partnered with major brands such as Coca-Cola, Chevrolet and Motorola. Coca-Cola distributed invites to the service through Coca-Cola’s Facebook and Twitter pages. In return, Coca-Cola is allowed to use Spotify as an advertising platform to target users based on their profiles or interests. Motorola announced that it was the exclusive mobile device and tablet launch partner for Spotify, will offer customers “coveted early access” to the service through its marketing campaigns.
Even the record companies are behind Spotify. Universal Music Group (UMG), a major national record label, announced the release of a playlist service called Digster that is completely integrated with the Spotify platform. Other record companies are expected to follow suit, preferring to monetize consumer music consumption that previously may have been diverted to pirated material.
There are several other music streaming services available in the U.S., like Pandora and Grooveshark. But what sets Spotify apart is a user base in the millions, a track record of success in Europe, and a business model that should continue to generate profit.
Spotify promises to finally break any tension still separating music lovers and record companies by integrating its service across the three major, modern platforms: online, mobile, and social media.
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