How Spotify Compares To Rival Music Sites
MARY LOUISE KELLY, Host:
The Internet radio service Spotify, has been a big hit in Europe. Now, it's hoping to repeat that success here in the U.S. But it's a newcomer to an already crowded landscape of music sites, including Pandora, Rhapsody, Slacker, iTunes and Amazon. That's just naming a few.
To walk us through how Spotify compares, we turn once again to Rich Jaroslovsky. He's technology columnist for Bloomberg News.
Hi, Rich. Good to talk to you again.
RICH JAROSLOVSKY: Glad to be here.
LOUISE KELLY: All right. So I have just pulled up the Spotify website here in the studio, and it asked me to create a user name and password, which I did. And then it told me that I need an invitation to use the free service. So I guess that brings us to the first point about how Spotify works, which is that there's several tiers of service.
JAROSLOVSKY: Exactly. The free service allows a limited amount of streaming in terms of hours per month. And you will probably be subjected to some advertising in it. There are also the two premium tiers, one of which for $4.99 a month you have no advertising. And for $9.99 a month you get no advertising, no limits on how long you can listen. Plus, you can put Spotify on all your mobile devices and have all your music accessible from whatever device you happen to have with you.
LOUISE KELLY: Let's give it a whirl. I've got the - this is the free version of Spotify. Let's try pulling up big Katy Perry song. All right, I see it. I'm clicking. All right, and that pulls right up.
(SOUNDBITE OF SONG, "TEENAGE DREAM")
KATY PERRY: (Singing) You think I'm pretty without any make-up on. You think I'm funny, when I tell the punch line wrong.
LOUISE KELLY: So that works fine. But again, on the free service I could only listen to so many songs before it would stop giving me access - is that right, Rich?
JAROSLOVSKY: They'll have a time limit on it. Basically, it's a number of hours that you can listen to. And there's also a limit to how many times you can listen to the same track. So they have deliberately created some let's say incentives - to encourage you to upgrade to one of the paid tiers.
LOUISE KELLY: Yeah. Now - and if I were to go over to the iTunes site right now, I'm just now getting over there to buy that same Katy Perry song we just heard. It would be $1.29, it's telling me. Do you see the market moving from downloading to streaming?
JAROSLOVSKY: Well, I think there will still be a market for downloading. But even Apple, with its new iTunes and the Cloud service recognizes that that alone is not going to be enough. And the, what we're really seeing here is a couple of things converging. One is this phenomenon of Cloud computing, where content resides not on your local devices but increasingly on the Internet.
And another is what Steve Jobs himself likes to call the post-PC era, where you're carrying all these different kinds of devices and all of them can access the music.
INSKEEP: Rich, what kind of things might draw you to say some of these other sites, like Pandora, like Grooveshark, some of these others?
JAROSLOVSKY: Well, all of them bring something interesting to the table. My guest though, is that individual consumers are not going to have an unlimited appetite for a bunch of different services. They're going to gravitate towards the ones that are the easiest to use, that offer the greatest catalog.
And to the extent that a service like Spotify can incorporate a little piece of what iTunes does and a little piece of what Pandora does, it puts it in a pretty good spot I think.
LOUISE KELLY: With all these services out here now, talk to me a little bit about price point. If you want to do the very top tier of Spotify we said that's going to cost you about $120 a year. How do the other services compare in terms of price?
JAROSLOVSKY: Well, a lot of them are still sort of looking for those sweet spots. But, you know, can go up in price from modest to very substantial. If you're buying several hundred tracks or several thousand tracks on iTunes that bill is going to rise pretty quickly. I think the companies are still kind of probing for what people are willing to pay. And it's a tradeoff between, you know, are you willing to pay this in order to get music everywhere? Or are you willing to pay a little bit less, but willing to take more limitations on what you can do with the music?
LOUISE KELLY: All right. Thanks very much.
JAROSLOVSKY: Thank you.
LOUISE KELLY: That's Rich Jaroslovsky. He's technology commentator for Bloomberg News. And he joined us from our member station KQED in San Francisco.
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