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Why Spotify says it can take on Apple in streaming

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Reports of Apple's rolling out a new music streaming service don't seem to scare Spotify.

The music streaming company is betting it can leverage its use of big data technology and huge user base to take on the Cupertino-based company if it does eventually enter the streaming space.

"We are a music tech company. And we think a point of differentiation is we are focused on the innovation and understanding behind how people consume music and understanding the trends and patterns throughout the day of how people are listening," said Jeff Levick, Spotify's chief business officer, at Cantor Fitzgerald's Second Annual Internet & Technology Conference on Tuesday in New York City.

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Spotify's purchase last year of Echo Nest, a music intelligence company, has helped it use big data to improve its platform for both users and artists, Levick said. And while Spotify is completely focused on providing the best streaming service, it's likely that Apple's big ambitions lie elsewhere, he said.

"Apple, at the end of the day, what is it? It has a $771 billion valuation now. I think the majority of that is focused on selling hardware and they do a great job of selling that, and I would imagine a part of their innovation would be on continuing to do that," Levick said.

Apple has not announced plans of a new streaming service, but there have been reports that it will launch a paid subscription product similar to Spotify's service sometime this year that will be powered by Beats, which Apple acquired last summer for $3 billion.

According to 9to5Mac, one way that Apple may challenge Spotify is by offering its streaming service for 20 percent less than Spotify's monthly subscription. It's also been speculated that if Apple launches the platform it may secure deals with artists that give it rights to content exclusively.

The practice, known as windowing, is a problem that Spotify has run into in the past. In November, Taylor Swift made headlines when she pulled her entire album catalog from Spotify's platform.

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"Windowing has existed for as long as we have been in the music business. So it's something we pay close attention to. We work with artists, as well, to try and get them to come onto Spotify in the same way," Levick said.

However, given that Spotify boasts more than 60 million active users and 15 million premium subscribers, it would likely be hard for artists to abandon Spotify, Levick said.

"As Spotify continues to grow, it's really hard to walk away from 60 million fans who are already paying for their music otherwise," he said. "It is an interesting conversation that is happening right now, but it's something we will have to wait and see how it plays out."

Apple didn't respond to a request for comment.