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Why Spotify Thinks It Can Beat Piracy and Apple

Spotify CEO Daniel Ek
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Spotify CEO Daniel Ek

On Tuesday, Spotify unveiled new tools designed to make it easier to navigate its 20 million plus songs. And despite the competition from the likes of Apple and others, CEO Daniel Ek said he believes Spotify has the advantage.

"People just want their music everywhere," he told CNBC. "They don't want it just on their Apple devices. They want it on their Sirius, and on their Samsung cell phones and many other places."

Mobile is just one of the two "super trends" going on right now, Ek said. The other is social.

"We think that in order to be truly social you have to start your company by being a social company, and that's what we did," he said.

Ek, along with board member Sean Parker, took to a stage in Manhattan Thursday to announce the new features. (Read More: Spotify in Top League With $3 Billion Valuation.)

One of those tools is a new "follow" tab, which offers custom curation by following Facebook friends, celebrities and "trendsetters." Artists can also curate their favorite music for fans.

A "discover" tab aims to provide a whole new level of custom recommendation. It suggests music based on everything from users' listening history, to how old a listener was when a song first came out, to what concerts friends have attended. And Spotify explains suggestions with comparisons to music you like.

A few other changes: Audio Preview lets users hear a bit of a song without leaving the song you're playing. "New Collection" allows users to save music they like, or music they want to listen to later.

Spotify also announced some major milestones.

Five million people are subscribing to its $9.99 monthly service. That's a million more than the company reported in July, and perhaps most important, more than a million of them are in the U.S. Ek said that makes it the biggest subscription streaming service in the U.S. (A subscription buys access to Spotify's library on mobile devices, an ad-free experience, and the ability to sync and listen to playlists offline.)

Spotify is competing against giants like Apple—which is on track to launch a streaming music service early next year,Microsoft's new Xbox Music service, Pandora, Amazon, and Google. (Read More: Apple Moves to Launch Music Service, Pandora Plummets.)

However, Sean Parker said Spotify has a bigger foe—piracy. But he believes Spotify is poised to win that battle.

"We compete with the vast majority of music fans who are actually still using piracy networks and we offer a legitimate solution that's significantly more convenient than piracy and significantly more convenient than iTunes," he said. (Read More: Florida Named 'Pirate Capital' of the Music World.)

One more announcement: Lars Ulrich of Metallica joined Parker and Ek on stage to announce that Metallica's whole catalog will appear to Spotify.

Why now? Metallica now has control over the rights to its music. The irony of Ulrich and Parker on stage together: Metallica's Ulrich was one of the high profile names atop the lawsuit that was partly responsible for shutting down Parker's Napster.

—By CNBC's Julia Boorstin; Follow her on Twitter: @JBoorstin

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.