Music lovers know Spotify as an app that enables you to share what you're listening to on Facebook. Today Spotify announced it's turning Spotify into a platform for other apps -- open up the service and you'll find an "app finder" on the left.
The service wants to be the destination for all things music, pitting it against Apple's iTunes, Google's new music store and Amazon's MP3 store. But unlike those tech giants Spotify isn't selling music ownership, but access. (Spotify has two options-- a free service with ads, and an add-free premium service which users can access from mobile devices.)
Spotify gathered journalists for its debut of its new music "ecosystem," which enables apps to be used within Spotify, which means users can play music from within any app. Taking the stage with Spotify CEO Daniel Ek, Rolling Stone co-founder Jann Wenner explained that Rolling Stone is partnering with the service to help users discover new music by creating playlists every day.
Rolling Stone is one of a dozen music-related apps launching today. Songkick allows users to track artists tours, The Guardian offers reviews, Billboard provides charts, Fuse has news, Moodagent provides playlists to fit your mood, Soundrop allows users to listen with friends, and TuneWiki has lyrics. Plus, now Spotify is also letting you pick 'Favorite Friends' and set up a News Ticker to tailor how you track your friends listening. Down the line we can imagine the likes of a Ticketmaster app, so users can find seats at a show without missing a beat of their favorite song.
Spotify is taking a similar approach as Facebook -- open up the doors for other companies to innovate, so it doesn't have to deal with the hassle of adding all these features. And Spotify is getting the benefit of all this brand-name content without sharing revenue. The company said there isn't a revenue-sharing agreement right now-- the partners simply benefit from access to Spotify's listeners and the music to integrate into services.
There's no doubt that these apps make Spotify more valuable at no additional cost. The question is whether this freemium streaming model will lure consumers away from a song ownership model iTunes offers. Besides ownership and freemium access, the third option is piracy -- and that's where Spotify thinks it'll gain share. CEO Ek pointed out that of the 500 million users listening to music online, most aren't listening legally. Since launching its Facebook integration in September it has added 7 million new subscribers and it has two and a half million paying subscribers. Today the company revealed that it has paid over $150 million to the music industry. We'll see whether that continues to grow to help compensate labels for CDs decline.
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