Spotify May Sound More Like Pandora

Is the digital jukebox we’ve grown to love closing its quarter slot forever? According to Bloomberg’s sources, Spotify is working on an Internet radio service to rival Pandora’s. That could mean more ads and less freedom, but it could also mean more songs.

Pandora’s 150 million registered users currently enjoy a personalized stream of music peppered with advertisements. For a small monthly fee, they can get just the music without the ads. The passive listening experience is just as effortless as radio, but much better because of an algorithm that strips each song down to its essence and matches it with other compatible songs. The first time I tried it, I had tears in my eyes.

Spotify, in contrast, is more like having an amazing music library: they have a vast collection of songs and you can check out as many as you want for free. Paid subscribers get the benefits of no ads and unlimited playing time. As of November, Spotify had 10 million registered users and only third of its subscribers were paid.

But Spotify also has a Radio button that creates a station for you based on your current top artist and suggests other popular stations. Then there are apps like Last.fm and Moodagent that give personalized recommendations based on what you play. It would appear that Pandora-like functions are already available on Spotify.

The company could be having difficulties working out arrangements with the record companies.  Spotify currently has licensing agreements with Sony Music, Universal Music, EMI Group, and Warner Music Group for a lot of artists, but is missing some major players, like the Beatles, as well as new releases from artists like Adele and The Black Keys.

Pandora has access to more music because they follow the federal rules set by the Library of Congress’ Copyright Royalty Board about playing copyrighted material.

Earlier this month, Spotify announced a partnership with Coca-Cola that would let Spotify’s music tag alongside the beverage company’s global ad campaign during the 2012 Olympics and beyond. At the time, it was hard to tell from all the marketing speak what the announcement actually meant, but if Bloomberg’s sources are correct, this could be one of many deals Spotify will make with brands to beef up its advertising in preparation for a whole new service.

Would you continue to use Spotify if you couldn’t choose your own songs?

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