STEVE INSKEEP, host:
(Soundbite of song, "Break Your Heart")
TAIO CRUZ (Rock Band): (Singing) Told you from the start, baby, from the start. I'm only gonna break, break your break, break your heart. I'm only gonna break, break your break, break your heart.
INSKEEP: We're listening to the top single being sold on the country's biggest music retailer - iTunes. It's "Break Your Heart" by Taio Cruz.
At $.99 a pop, all those downloads mean a lot of money for iTunes. But the amount of music sold online is still smaller than the amount of music downloaded for free. The big music labels are still on the lookout for ways to entice fans into paying.
NPR's Laura Sydell reports on a music streaming service that's popular in Europe and may be headed for the United States.
LAURA SYDELL: There's a lot of buzz, these days, about one service in particular. It's been hit with more than 7 million fans overseas.
Mr. TED COHEN (Managing partner at TAG Strategic and chair of MidemNet): Spotify has just completely charmed Europe with its ability to deliver to you, unlimited streaming of any song you've ever thought of in your life.
SYDELL: Ted Cohen used for work for EMI Records. He now runs a music consulting firm. Spotify subscribers can have access to more than seven million songs from any Internet connected computer.
(Soundbite of song, "Beethoven: Symphony No. 5")
(Soundbite of song, "Hey Good Lookin'")
Mr. HANK WILLIAMS (Singer-songwriter): (Singing) Say Hey, good lookin', whatcha got cookin'?
(Soundbite of song, "Single Ladies")
Ms. BEYONCE KNOWLES (Singer-Songwriter): (Singing) If you liked it then you shoulda put a ring on it. If you liked it then you shoulda put a ring on it. Don't be mad once...
Mr. COHEN: It's a wonderful experience when you try and stump it, and everything you try and stump it with comes up.
SYDELL: And it's free, if youre willing to listen to a few ads. Cohen says the record companies aren't anxious to let Spotify into the U.S.
Mr. COHEN: The rights holders are all concerned that we went from selling a $10 CD to selling a $.99 track, and now we're talking about to a quarter of a cent per stream played per user.
SYDELL: Spotify has been trying to get fans to pay 10 Euros a month so they dont have to listen to any ads. That idea finally started to catch on after customers were able to get all seven million songs on their smart phones. But Even if Spotify doesn't take off in the U.S., the largest music retailer, Apple, may launch a similar service. It recently purchased the music streaming Web site Lala.com.
But if it's any indication, subscription-based music streaming services like Rhapsody and Napster have been around for years and they aren't that popular. It's a hard sell at the Student Union at San Francisco State University. Just ask 21-year-old Carlo Sicat.
Mr. CARLO SICAT: I don't want to go through the process of like opening up my Internet browser, actually finding the music, searching for it. I could just go on my computer. It's much less of a hassle to do that.
SYDELL: Twenty-one-year-old Greg Harty says he doesn't even listen to all the songs he has on his iPod.
Mr. GREG HARTY: Most people I know, don't listen to all 500 of those songs if they have it, full on(ph). They might just cycle through 30 or 40 of them, or the same song.
SYDELL: And, of course, many students get their music free from friends and illegal download sites. Still, analysts believe that Spotify could entice them because they can try it for free before they sign up.
Bruce Houghton, who edits the music and technology blog Hypebot, says that's what's happened in Europe.
Mr. BRUCE HOUGHTON (Editor, Hypebot): The average Spotify user, and this isn't a secret, has 15,000 tracks in their Spotify playlist or favorites. I mean, how many of us own 15,000 tracks? So the case with a lot of these services is simply getting people to try them, and then the word spreads.
SYDELL: But it's not clear if the record companies will allow a free service when Spotify launches in the U.S. Still, at a time when record sales continue to drop, the major music labels may be ready to try anything.
Laura Sydell, NPR News, San Francisco.
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