Spotify was not available in the U.S. until 2011, and they just recently launched Spotify Radio in all the countries it is offered in. Spotify added half a million users on its Facebook app in just May alone, and hit 20 million users globally (although compared to Pandora’s 100 million users in the U.S, that’s nothing). Out of those 20 million users, the conversion rate for users signing up for Spotify premium is 17%. Among active users, the conversion rate is 27%, which means there will be more than six million paying subscribers by the end of next year.
This year, Spotify’s app went branded with Intel and McDonalds, adding more functions to the desktop version for users that opt to install them. Intel’s app, called Sifter, lets you “sift” through Spotify’s playlist and save editable playlists. McDonald’s ListenIn allows you to listen to the most popular songs – songs that your Facebook friends listen to the most. Spotify is obviously getting extremely big; just earlier this year they partnered with Coca-Cola to bring free music to all over the world. These new advancements, especially the Coke one, give Spotify a huge advantage in my book.
Spotify Radio is upfront with how many skips you get — 5. However, if you pay $9.99 a month, you will get unlimited, commercial-free music on computers and mobile devices and will also be able to skip as many songs as you want. Another difference from Pandora is that Spotify has deals with record companies while the other doesn’t, which means Pandora, which was actually started in Oakland, California, can’t expand out of the U.S.
Everything seems to be in favor of Spotify, except price. Price wise, Pandora still has a competitive edge. Ad free Pandora, called Pandora One, is only $36 per year. Spotify’s premium service is $10 a month, accumulating to $120 a year. As a consumer who’s used both, if I just wanted to use this service as a radio platform, I would have to go with Pandora. I understand that it takes a lot to keep up with licensing fees for all the record companies, but why pay more than three times Pandora’s price to get the same function for mobile radio?
As for now, Spotify Radio for mobile is only available for iOS, and they don’t have immediate plans on extending it to other platforms. As to using this service, I’ve decided for my desktop, I will use Spotify since I like to control my playlist. However, as for my mobile phone, I may continue sticking to Pandora for radio… at least until there are more features to make the multiple dollar signs worthwhile.
