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The iTunes Killer
Apple's worst nightmare, and a music lover's best friend, is about to cross the Atlantic. Spotify offers free, infinite music—and it's all legal.
The European online music service Spotify offers six million tracks—a practically limitless catalog spanning Aaron Copland to ZZ Top—in an interface as polished and intuitive as Apple’s iTunes. And unlike the pay-per-song iTunes, Spotify’s entire library is free for the taking, assuming users can tolerate an occasional advertisement.
The service is presently confined to Europe, where it’s available in the U.K., France, Spain, Norway and Sweden—but it is planning a U.S. launch for early 2010. The prospect is surely creating a little anxiety at Apple’s Cupertino, California, headquarters.
Inside the tech world, the summer days have been flush with news of Spotify’s rise. Facebook CEO Mark Zuckerberg proclaimed Spotify “so good” amid chatter that the two companies have been secretly negotiating a partnership. The Hong Kong billionaire Li Ka-shing confirmed that he had invested an undisclosed sum in the startup. And if back-of-the-envelope math is to be believed, Spotify is now valued at €170 million, or about $244 million.
When Spotify arrives in the U.S., Apple may find it difficult to compete with “free.”
In Europe, Spotify has shown itself a keen competitor. In August, the head of Universal Music in Sweden said Spotify has become the label’s largest source of online revenue in the country, overtaking iTunes. Now Spotify is turning its sights to the U.S., where a spokeswoman says the company plans to launch in “early 2010.”
So when the service crosses the Atlantic, will it unseat iTunes, or is it destined for the graveyard, like so many other ambitious music startups before it?
Test-driving Spotify turns even the most hardened cynic into a believer. Like iTunes, Spotify downloads onto a PC or Mac, offers access to a vast library of music (more than six million tracks, compared to Apple’s 10 million), and enables users to organize songs into playlists. The crucial difference, of course, is that with iTunes, songs must be purchased and stored on a computer’s hard drive, while with Spotify all the songs are free and stream instantly over the Internet. It’s not difficult to understand why bloggers have called Spotify “the best desktop music player we’ve ever used.”
In exchange for bathing in Spotify’s sea of music, users listen to short advertisements that play once every half-hour. For about $15 a month, depending on the country, users also may upgrade to a premium service that removes the ads and plays higher-quality audio. A subscription also allows consumers to use Spotify on a smartphone; otherwise, it’s not possible to access the music on the go, somewhat diminishing Spotify’s appeal. (A forthcoming iPhone app allows users to play Spotify playlists even without Internet access. Following speculation that Apple would reject the app, the iPhone maker last week approved Spotify for listing in the App Store.)
The fine print of Spotify’s agreements with the major record labels is unknown, but the startup presumably has to pay them royalties each time their music is streamed. (The labels own a substantial stake in the company, which some commentators have speculated amounts to an advance on those royalties.)
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Apple doesn't make money off iTunes. Or least not much. It makes money off the hardware. So your point is ... well ... pointless as its meaningless to Apple's bottom line.
so, apple makes no money from their dollar-per-song fee? hmmm... that doesn't make sense... since they've been sued for those nonexistent profits in europe.
of COURSE they make money.
What are the odds the U.S. government gets it's hands on the new
service and starts taxing for downloads ? FREE ?
Oh, sophia5!
You are such a trip!
I believe Apple makes about 30ยข per song, but their costs are very close to that. They make a little profit on the store, but not much. iPhones and iPods are where they make their profit.
I think he means they don't make much profit on iTunes (this is true). Apple does get revenue per song but most of it is passed to others. Its a loss leader for Apple's hardware products (IPod etc.). Spotify is OK but like Pandora and other streamers you need to be connected to the internet to use it. The songs are streamed and not physically downloaded. Not so good for listening offline which is what most people do most of the time. No iTunes killer here - sorry.
My fear, sopia5, is that an ACORN Death Panel will get there even before guvment has a chance to tax it.
Lulz to Bravian's "point."
First, Apple cares about the desirability of iTunes use. The iTunes platform is what drives ipod hardware purchases and in part apple computer purchases. Although the revenue stream from selling songs is minor compared to that generated through other Apple verticals, the platform itself is part of the value package of a hardware purchase.
Secondly, this is not Pandora. Although I am less than convinced by a Zuckerberg endorsement, this is something new. Su2illy is right. You can choose your songs and make a playlist. It is a mobile application for anyone with a phone. Apple exceeded its 10 million iphone sales goal last year correct? As an iphone user I am already more inclined to open up Pandora than iTunes. I would be even more inclined to do so if I could choose individual songs. The market for free music players has changed since the time of Kazaa etc.
pandora is not the only one.....you should try out www.last.fm
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wow. they've invented... internet radio. again.
dont be stupid, remind me the last time u can choose songs for radios
don't be insulting. songza & lastfm.
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thank you, mhmck05. this is just more hype; like the myriad "iphone killers" and "ipod killers" we've already seen. frankly, i wish there *were* more competition.
They already tried this with Ruckus. Same model - choose the songs you want, listen to some advertising, even a pay-for-download option if you wanted the MP3.
The problem?
NO ONE WANTS TO BE TETHERED TO THEIR COMPUTER.
That's why God himself forged the iPods out of Jesus' bones, so that we might listen to our music from our pockets. Spotify requires you to have the desktop application running and doesn't transfer songs to iTunes.
I know there's an iPhone app coming, but it's really going to be limited as far as audience goes. Most people won't want to stream over 3G as it costs them, so they'll be relegated to WiFi-and I think for $10 they'd rather just buy the damn album off iTunes or Amazon.
Bravian - last time I checked the details Apple was making at least a 10% margin on iTunes, although they claim that it's barely break even. They've sold over 6 billion songs so that's a big chunk of change.
I heard there's a website where you can watch streaming video that includes music. I think it's called "Youtube"
Hmmm... sounds like Pandora and Slacker, doesn't it?
Nope. Pandora and Slacker serve you the music that they choose to based on what you like. This service serves you the exact artists/songs you choose.
Let me get this straight - free music, but you can't take it portable? How the hell is that an iTunes killer? 90% of my music listening is done on the iPod, not iTunes.
True Dat! Most of my listening is done in the car and out and about. Not at my desktop. So, self programable internet radio doesn't really do anything for me.
And so how is this different from Imeem or Pandora? Your article is misleading. In the excerpt, it says unlimited free downloads, but the article then goes on to say music from Spotify streams from the desktop player.
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Because unlike Pandora (which I love as well) you choose the exact song you want to hear. You can store it ( on their servers) in a play list. So you open the program (not the web page) and you pull up what song(s) or list of songs you want to hear. Pandora only lets you bring up an artist or artist similar to the artist you entered. The free version works on your computer ( if you don't have your computer hooked up to your home stero, it's time you did so) For a fee you will be able to run Spotify on your iPhone, iPod Touch, Android Phone, Black Berry, Palm Pre or a phone running Windows Mobile. I see this ending Pandora and taking a chunk out of iTunes. But as far as being an iTunes killer? That's a cult that's not going away anytime soon.
I doubt it will kill Pandora... a lot of people choose Pandora specifically because it lets them hear bands they've never heard of, songs they didn't expect, and gives you instant variety in general.
You can only use this on your phone if you have internet access. So if your out in an area where reception is spotty or without 3G or wifi, you are SOL. And subscription based music services (which this will be to get it on your phone) have been very slow to take off in the US.
Pandora is an EXCELLENT online music player, but you don't pick the songs played, just rate songs and genrest ogive it an idea of what to play next.
I love Pandora. And it's all free with no commercials.
False. Pandora has started employing commercials. But you're right about its excellence--it won't go away any time soon because of the new music discovery aspect.
In addition to commercials, they are limiting radio use to 40 hours a month. That takes away the appeal for those that prefer listening to songs without worrying about creating playlists (like myself).
I showed this to my 15 year old daughter this morning right before she took off on her bike equipped with an ipod speaker. She was still laughing when she rounded the corner.
f*cking tremendous
I had to buy her the speaker (which fits on the frame like a water bottle) because I knew she would wear earbuds if I didn't. It is controlled by a remote on the handle bars. Works like a champ.
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Umm HAI welcome to internet radio. It's called grooveshark, and you can choose any song you want.
This is by no means an Itunes killer. From the description in his article, Spotify is just like connecting to someone's shared library on Itunes; a very huge library, but a shared library nontheless.
People want to own their music. They want to burn CD's and import the songs on mp3 players. Spotify will be great for people with passive relationships with music, but for people who like to own their music, this will NOT kill Itunes or any other mp3 store.
If anything, this Spotify will become popular for previewing a song or album. Other than that, I can't really see a point to it.
Sorry bud but it's not free if you have to pay a fee. Perhaps you should have said for a fee you get unlimited access to music. Plus the music isn't portable. Try again buddy. No need to create or generate mass hysteria on this.
"and we are not saved..."
iTunes will not be worried with an online streaming site...
How much is Spotify paying for this press rele...errrrrr....editorial?
I live in France, consider myself "in the know," read all the "cool" magazines like Les Inrocs, and have NEVER heard of this :cough cough: iTunes Killer.
Plus, in one point of this piece, the "journalist" says you can download the songs, then elsewhere he says it's streaming.
Once again TDB loses points by letting HORRIBLY INACCURATE articles like this get through.
Not only is it NOT free, you either have to have an invite, get on the waiting list, OR pay to have the "Premium" account.
Perhaps if you made a friend you would get an invite. I know 12 people who live in the U.K. and all 12 use Spotify. Oh, and they use it for free.
Just a few thoughts. I know I spelled "stereo" wrong in an earlier post but I'm beginning to think some of us need to take a refresher reading class (robjh1) and it's not downloaded music (sophia5). Once again, not an iTunes killer but can't we all agree that it's going to be a nice site? Or do some of you really need something new to complain about or put down?
what about imeem.com? I don't know if they have as many songs, but they also allow you to choose the songs you want to hear and to create playlists. They have both music and videos (with short advertisements preceding only the videos). And they have various suggested and featured playlists.
"Hong Kong billionaire Li Ka-shing" - any relation to Ka-ching?
I am a Rhapsody user - have been for about 3 years. I pay $16 a month and get to download the songs of my choosing to my Creative Zen MP3 player and take it on the go. I do this because I devour albums and I would go broke if I had to buy every album that I would end up listening to only once or twice. I usually end up purchasing the albums I really like because they have lasting appeal. I tend to listen to a lot of Indie and find that Rhapsody offers a good variety. I also use LaLa. Similar concept to Spotify where you can stream tunes online from your own library or others' with the option of purchasing individual songs. If you love listening to a lot of albums and don't want to go broke, then Rhapsody or other subscription services are very attractive. I'm not into music to amass a collection. At some point everything will be available to stream digitally so what's the difference if it's on your pc vs a server out in cyberspace?
the difference is that you are dependant on a server (via verizon, att, tmobile, sprint) outside of your control. I'm all for 'the future' but I (and others, i suspect) don't want to be separated from our music for a silly reason like "damn, I don't get any reception out here in boise, tulsa, arrowhead, etc. This will be good for Apple and keep them on their toes!
I use Rhapsody as well, and I have a car where i can plug in my MP3 player, so i am never tethered to my computer. I love the option of paying a $15 fee every month, playing what i want, when I want, and if I tire of the songs, I delete them and move on. I would have gone broke if I had purchased all the songs I have in my "library."
Thank you Bigslew! I too am a Rhapsody user for about the same time, with the same service. I would go broke as well. I don't need to burn CDs. I love my Rhapsody!
How is the recording industry still making money? I understand they get a cut from downloads, but it seems like music stores that sell cd's are going out of business. By 2020 there will be no need of a cd player anymore because they will all be extinct.
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Plenty of free music on the Internet already, including the big one: YouTube. In fact, YouTube may be the best music site on the Internet, paid or free.
$15.00 a month is not free! I like iTunes where I pay for exactly what I want--no more no less and it's on my computers AND my iPhone which is with me everywhere I go. Spotify is gonna fail!
Thank you.
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