As you may recall, streaming music service Spotify leaped across the pond to American users last month with the blessing of the major music labels. For those of you who don't recall, Spotify is trying to do for music what Netflix Instant did for streaming video: instead of a Pandora-style system that lets you listen to music that an algorithm chooses, Spotify gives you access to all the songs in its cloud to organize into playlists and listen to as you please.

Well, the numbers are starting to come in, and so far things look promising: the US version of Spotify has racked up 1.4 million registered users in spite of the free tier's invite-only status. Of those users, roughly 175,000 are paying users, a conversion rate of 12.5%, though this figure doesn't distinguish between the two different pay tiers ($5 a month gets you unlimited streaming and no ads, $10 allows you to play songs on your mobile device, both allow you to use Spotify without an invitation).

While cloud music services like iTunes in the Cloud, Amazon Cloud Player and Google Music still rely on you, to some extent, to purchase and populate your online library yourself, Spotify's all-streaming a la carte option can be more appealing to people who want to listen to what they want, when they want, where they want.

Source: AllThingsD

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  • chucknelson - Tuesday, August 9, 2011 - link

    While I think the idea of spotify is great, I don't see enough value in it to pay. I think it works well as an ad-supported service to discover new music, just like Pandora, Grooveshark, etc., but I'll leave my money around for buying MP3 albums of music I like, either by artists I already love or via discovery.

    I really hope TV/Movies end up this way in the future. Paying money for cable, where I'm shown ads anyway, is not really ideal. Let me discover shows through ad-supported streaming services, and I'll buy/subscribe to things I like.
  • mixim - Tuesday, August 9, 2011 - link

    Spotify Open or Free, is free of charge and is add supported. If u like the service, but find the comercials annoying, u pay $5 a month and you have an unlimited access to most music in the world without ads. I mean, isnt that exactly what u are saying? Also, u can buy and download your favourite songs as mp3 if u wish.

    Think of spotify as an adsupported itunes music store, without the 30 sec limit for each song. It works really really well for discovering and browsing new music,
  • quiksilvr - Tuesday, August 9, 2011 - link

    But Spotify with ads is still pretty limited compared to the competition. With Grooveshark, you don't get audio ads between your songs, you just get soundless banner ads on their page. And there is no listening limit whatsoever.
  • FaaR - Tuesday, August 9, 2011 - link

    I'm a Spotify Premium user, and I have been since december of last year. Spotify totally rebooted my personal relation with music, since I'm of limited economic means I can't mindlessly throw ~15 bucks a pop on CD albums.

    That means I haven't really listened to music in over ten years. No, I was never one of those who torrented music, too big a hassle and too time consuming IMO. With Spotify, I have everything right at my fingertips. Virtually instant access, at home on my desktop, on the move with my laptop, or in my iPhone. Playlists that automatically synch between devices. And access anywhere where I can get a wifi or 3G data connection, which around where I live, is basically the whole country now. On a bus, a train... It just works, and works great.

    Right now, I have ~4-5 grands worth of music queued in my playlists, if I were to buy it all from a place like the iTunes store for example. Artists and songs I haven't heard literally since I was a teen, back in the 80s. It was a second awakening for me.

    And you're seriously saying that's not worth 10 bucks a month? Heck, 5 bucks a month if you don't need high-bitrate tracks, offline or smartphone access. For me, this is in the no-brainer category. It's effing CHEAP, for all it offers. It's the best 10 bucks a month I ever spent on anything.

    So why would it be money down the drain? That's ridiculous.
  • Hrel - Tuesday, August 9, 2011 - link

    because you don't own the music. You can't put it on your mp3 player. You can't use it when you have no internet. If it was 5-15/month to download all you want, that'd be something else entirely. As far as the online "organize your own playlists" thing and using it for discovery that's great! As long as it's free; ad supported by soundless banner ads. But if it interupts the songs like pandora I won't use it. I already use youtube to stream music playlists for free. A site dedicated to music, with more songs available and lower bandwidth usage than youtube would be great. But like I said, that part should be free; or it's money down the drain. If I'm spending money I better be downloading the song in DRM free Mp3 format at 320kbps.

    I think this is something music execs just never grasped; people don't want to buy 1-3 CD's a year anymore. They want to buy 100's or thousands of SONGS every year. They want to hear every song entirely before buying; probably several times. They could charge 10 cents/song and based on my usage patterns alone they'd make 100 bucks/year/person. Let's say they get a modest 40 million users who think 10 cents/song is fair. (probably gonna get way more than that). That's 4 BILLION dollars/year. If you can't run a business on 4 BILLION a year... not only are you an idiot but there is something seriously wrong with you that you can blow through that much money.

    I think they could tier the prices too. New releases 25 cents. After 3-12 months drop it down to 10 cents. After either 10 years or when demand drops below a certain point (to be determined based on costs/profit ratio's. I'd say for instance you spent 15K recording and marketing a bands album, once you've made 30K off that album) drop the price down to 1 Cent. "Woah woah woah, 1 CENT!" Yes american business man, 1 cent. Because even at 1 cent you're making BILLIONS/year. Stop being so damn greedy.

    I've thought a lot about this. It'd be great if the site became it's own music studio. Had recording studios in every major city, marketed it's own musicians on it's site. Had sections dedicated to most popluar, highest rated, most original new music. Things like that so new/unheard of bands could get their sound out easier and for less money without needing all the corperate connections you traditionally need. Bands have never made real money off album sales anyway, so if this site is a way for them to earn a modest income but gain enough popularity to earn the big bucks doing concerts then I'm all for that. Hmm, maybe 2 cents should be the minimum, 1 cent for the studio and 1 for the artist. Artists should get 50/50 of every song sale too, unlike current album pricing where they get like 10% even though they did 90% of the work.

    I've rambled enough, I've thought tons about this and if no one beats me to it I'll make it happen one day once I have the capital and influence to do it.
  • jabber - Tuesday, August 9, 2011 - link

    You know all those tracks you paid for and downloaded?

    Reckon you'll still have perfect access to all of them in say 10 years time?

    I wouldnt bet on it.
  • rs2 - Tuesday, August 9, 2011 - link

    I have one word for you:

  • rs2 - Tuesday, August 9, 2011 - link

    Careful. The notion of paying for this-or-that specific bit of digital content is an antique. Eventually it will be replaced with a "you pay for unlimited access to all content, and content producers are given a cut based upon the relative popularity of their content" model, similar to what happens in services like Spotify.

    Given enough time, it will cease to even be *possible* to purchase music one album or song at a time, or to purchase movies one title at a time. Your only options will be access to everything, or nothing at all.
  • imaheadcase - Tuesday, August 9, 2011 - link

    I don't see it better than any other service, worse its clunky compared to others. The UI is not very user friendly.

    To me it seems like a old version of Musicmatch Jukebox.
  • Choppedliver - Tuesday, August 9, 2011 - link

    Whats this got that napster or rhapsody doesnt? Lots of music, one price, stream all you want. *yawn*

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