Spotify, our favorite freemium music service you probably can't use, announced two new payment plans for its service in addition to the free, ad-supported and premium versions it has offered in Europe for over a year now.
The new plans bear some similarity to the rules by which U.S.-based music services play, and that could mean Spotify is finally getting ready to launch stateside. The signs they are on a verge of doing so are piling up, including the purchase of server space stateside.
Spotify Unlimited allows users to pay £5 or the equivalent per month for ad-free streaming to a single computer (MOG charges $5 for the same). Meanwhile a new free version called Spotify Open allows Europeans who had not been invited to sign up for free accounts in the past to join without being invited -- however, they can only stream up to 20 hours of free music per month, with advertisements.
Those who already access an unlimited ad-supported Spotify for free will continue to do so, and Spotify still offers its Premium service for £10 per month, a tier which removes ads, improves sound quality to 320 Kbps, allows smartphone access and stores thousands of songs on the mobile device for times when streaming isn't possible.
In addition to the six European countries where it was already available, all of these services can now be accessed from... the Netherlands. What about U.S.?While Spotify is still not available here, these new pricing plans seem designed with a U.S. rollout in mind. It has long appeared unlikely that the company would be able to launch in the United States without altering its unlimited freemium model, given how record labels' on-demand rates stack up against ad rates for audio services. Pandora, Slacker and others manage to offer free, ad-supported music services here -- but that's only because they play stations rather than whatever song you want at any given time, and so they pay much lower rates.
Looking at these new plans, a picture begins to emerge of what Spotify would look like if it launches in the U.S. by the end of the year (the most recent estimate listed on Not-ify, which tracks Spotify's always-impending US availability).
Spotify might be able to cover up to 20 hours of free listening by U.S. users per month, given its sizable war chest, in the hopes that enough customers are willing to pay to upgrade to mobile at the going rate of $10, which Rhapsody charges, or an unlimited account with ad-free listening for $5, which MOG charges, as mentioned above.
At that point, the major differentiators between Spotify and those services would be its excellent design and that 20 free hours of listening per month. Without a free version, Spotify is Rhapsody's good-looking Swedish cousin, as we've said before. With a free version, however, Spotify is a totally different animal. Rhapsody offers 14-day free trials and requires a credit card, while Spotify Open offers 20 hours of free listening per month, no credit card required. We know which we'd prefer.
Were they to be imported to this country, these plans would erect enough of a barrier to staunch the bleeding the service would incur with an unlimited ad-supported version, while still offering a superior option to Rhapsody's free version.
At that point, the $64 million question will be: Can Spotify convert enough users to the paid versions to subsidize that 20 hours per week? We can't wait to find out.
See Also:
- Warner Won't Drop Spotify in Europe, But Could Shape U.S. Launch
- Inch-by-Inch: Spotify Now Buying Server Space in United States
- Rhapsody's iPhone App Beats Spotify, MOG to the Punch
- Spotify Hits 250K Paid Subscribers; U.S. Rollout Still Unknown
- Spotify Set to Take America by Storm
- Spotify Becomes Platform, Makes U.S. Music Fans Even More Jealous
- Apple Approves Spotify iPhone App; US Rollout Still On Hold
- Rhapsody Shrugs Off Real, Viacom to Become a Startup
- SXSW: MOG's Mobile Music Apps Go Beyond the Playlist
- MOG's $5 Monthly Music Service Highlights Spotify Obstacle
