Spotify launches web radio service, competing directly with Pandora – Peter Kafka – Media

Many people confuse Spotify’s streaming music service with Pandora’s streaming music service.

Now they are going to be a lot more confused. In a way that is good for Spotify and a problem for Pandora.

Spotify, which lets people listen to music for free, on demand, has finally launched its own web radio service, which more or less mirrors Pandora’s core radio service. That is, it is a “real” web radio service, accompanied by advertising, unlike the iterations Spotify has released in the past.

I saw Spotify’s offer via a very quick demo yesterday. If you’re a Pandora fan this looks pretty convincing, although you’d better check it out for yourself, as long as you have an iPad or iPhone – an Android version is in the works.

But here’s the key to remember: Spotify now offers an option that allows users to use the service for free, on mobile devices. Until now, the only way to get Spotify on the go has been to pay $ 10 or more per month, while Pandora’s main selling point has been free mobility.

So Spotify now has the ability to expose many more people to its product, hoping to eventually convert some of them into paid subscribers.

And Pandora, who has always maintained that he saw no impact from the launch of Spotify in the United States last summer, may no longer be able to tell. Because if you love Pandora, you might love Spotify just as much.

A few comments :

  • Like Pandora and all other web radio offerings (including Clear Channel’s iHeartRadio and the popular new Songza), Spotify’s radio service is “DMCA Compliant”, which means Spotify does not need permission. music owners to deploy it. This means that you will be able to hear The Beatles and others resistant to streaming music services. [UPDATE: Spotify does have the ability to play music it hasn’t licensed, but hasn’t introduced it yet. So no Beatles for you, for now.]
  • But it also means that the service comes with restrictions, like a limited ability to choose songs and skip songs you don’t want to hear. And just like Pandora, the free service will not work outside of the United States, due to licensing issues.
  • Since Spotify also offers a paid music service, it can integrate the two in ways that are attractive to subscribers. For example, paid subscribers can fast forward through songs. They can also access automatically generated playlists of songs they have heard on the radio service, and choose songs from there.
  • Another difference between the two services: Pandora programs music based on a complex algorithm based on the musical “DNA” of the songs. Which means if you tell Pandora that you love Ronettes’ Be My Baby, he’ll find other songs that feature “rock & roll roots,” “a subtle use of vocal harmony,” “a piano acoustic rhythm ”, etc. Spotify says it relies on the “social graph” so it will find music that people who love Ronettes like too. You may or may not notice it.
  • Web radio is free for Spotify users, but not for Spotify: it will have to pay music owners a fixed price for each song it streams, and it costs a lot. And these costs keep increasing as more people use it. This is why Pandora has not yet made a profit.
  • Spotify says it will be able to cover its costs from the advertising business it has already established. But as Pandora has shown, selling mobile advertising for music services is a challenge.

Why is Spotify now rolling out web radio?

If you’re a Spotify Bull, you can tell yourself that it’s always been on the product roadmap, and they’re just getting started now. If you’re a bear, you can argue that he’s struggling to grow his user base – at the last report, 10 million active users and three million paying subscribers – and that he needs to find new users. if he wishes. meet the dizzying expectations of investors. Maybe both.