Spotify Could Steal Twitter Limelight in Move West


Just days after Microsoft announced that they would be launching a rival service to the free online jukebox Spotify, the European company has declared its intentions to break into the US market.

Recruitment has begun in New York for staff to implement the US launch of the hugely successful music streaming site, along with a search for suitable premises for an American HQ. Swedish co-founder Daniel Ek said that if all went to according to schedule, Spotify could be available in the US by the third quarter of 2009.

Spotify has managed to slip by relatively unnoticed on the digital media map, mostly on account of the insane amount of press coverage and media attention devoted to Twitter. The blogging service of micro messages has dominated multimedia talk this year pushing Spotify somewhat out of the limelight.

However, despite playing second fiddle to Twitter’s masterstroke, Spotify is the company which looks most likely to turn a profit first. Making effective use of online advertising, which unlike Twitter, sits nicely into Spotify’s business model, the streaming service is interrupted every 30 minutes with a 60 second burst of digital marketing from the likes of IKEA, Nike and Sky.

Spotify is getting 50,000 new users a day across Europe, which also unlike Twitter, are using the service more than once. Aside from a select group of hardcore tweeters, Twitter is notorious for having the retention rate of one of Jordan’s outfits. The average Spotify user on the other hand spends an hour a day streaming music with an impressive 1 per cent click through rate from internet advertising.

Spotify are negotiating with US executives in order to expand its streaming licensing laws across the Atlantic. The platform is ready to go, but without contracts in place the idea is a non-starter. This could give Microsoft a head start if they can roll out their rival system by the end of this month. On top of that, Microsoft are sure to spend money to make their product successful, whereas Spotify plans to rely on word of mouth and viral marketing to capture their market.

However, Microsoft have been beaten before, and Spotify’s founders are confident in their product. Mr Ek said he would be unwilling to part with Spotify at this stage, even for $400 million, the current company valuation. “If it’s done right, this could be a billion-dollar company,” he said according to The Guardian.