I’m on a Spotify radio. I’m on a Spotify, whoa-oh, radio.
You know in Star Trek II: The Wrath of Khan when Captain Kirk screams KHAAAAAN!
That’s probably what Pandora is doing today but they’re yelling SPOTIFYYYYY! Okay, yeah, it’s not quite as catchy. Spotify will let users access its enormous library of music in a radio-style format via an app on Apple devices, similar to what Pandora has already been offering. The idea is that by offering such a service for free, Spotify can better lure customers who want the ability to choose particular songs that they want to hear and thus upgrade them to the paid service.
Similar to Pandora, Spotify will allow users to create a radio “station” by selecting artists, genres or playlists. The company is betting that free, ad-supported radio will attract users who can be converted later into paying subscribers.
“We feel like the radio experience of just hitting play, leaning back and not controlling exactly what plays is core to a great music experience,” Charlie Hellman, vice president of product at U.K.-based Spotify, said in an interview.
And Spotify may be better positioned to grow:
Spotify has content deals with Sony Corp. (6758)’s Sony Music, Vivendi SA (VIV)’s Universal Music, EMI Group (EMIS) and Warner Music Group. Under those agreements, artists, record companies and publishers receive a cut of ad sales and subscriber fees.
Pandora doesn’t have agreements with record companies. Without legislation in other countries, Pandora has been unable to expand outside of the U.S.
Still, Pandora’s audience is larger. Closely held Spotify, founded in 2006, said in November it had 10 million registered users worldwide, and 3 million paying subscribers. Pandora, started in 2005, said it has 150 million registered users, with 49 million listening within the last 30 days.
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