The music industry has been one of those areas where the introduction of the Internet posed a serious issue to how the entire industry works. Gone is the traditional way of distributing music and the problem becomes how do we sell music online in a way that is fair to everyone involved. For years websites have been popping up trying to figure out how to effectively do this.
For the last few years Spotify has been building their business on the premise that free ad supported music model with unlocked iphone 4 is one that can be successful. In addition to free, users have the ability to pay for a premium service without any ads. The big challenge for Spotify has been how to effectively enter the US marketplace without disrupting the major record labels. In July of this year they officially launched in the US and the initial data has come in relating to their growth.
An unconfirmed source suggests that Spotify now has over 250,000 clients in the US alone. Worldwide Spotify is reported to have over 2 million paid subscribers. If the reports are accurate, it suggests the Spotify will continue to grow and be a major player for music distribution and consumption here in the US.
Much of their early success can be contributed to their recent partnership with Facebook. Opening up access to Facebook's 700 million+ users provides an ideal environment to push this type of service. This is another example of how the power of Facebook and be use to have a significant impact on their partners and an industry as a whole. We will continue to see similar partnerships; Spotify will continue its growth and most likely be the top subscription-based music service online. They also recently announced that their service is now being offered on the Boxee hardware device.
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