Bad news for already strategically-challenged U.S. music subscription services such as Rhapsody
Spotify’s speed offers the company one significant advantage over its American competitors. (It achieves that speed partly through using a peer-to-peer network, which lets a song play almost instantaneously.) But its crucial selling point has been its free access, which the company believes can lure in new users, who then get attached to its playlisting and social networking features and will be enticed to join.
That reliance on free access, however, has also worried American record labels and some analysts, who fear that it could cannibalize sales from other sources, like iTunes.
“What Spotify seems to be doing is solidifying a perception that music should be free,” said Mark Mulligan, an independent media analyst in Britain. “It’s one thing to download from BitTorrent and keep looking over your virtual shoulder to make sure no one sends you a cease-and-desist letter. It’s another to be streaming music freely from a service that you know even the labels are advocating.”