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Spotify Expands Free Music Streaming, Threatens Pandora

Spotify Expands Free Music Streaming, Threatens Pandora
December 11, 2013 1:00PM

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Now that Spotify is rolling out free streaming to mobile devices, it may be able to overtake Pandora as well as iTunes Radio. Both Pandora and iTunes Radio have controlled the mobile side of the industry but with Spotify's enormous desktop user base, it is likely that many of its users will take advantage of the new mobile service.

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As the music industry moves online, streaming music services are becoming popular not only desktops but on mobile phones as well. Although Pandora has continued to control a large portion of the market, Spotify is beginning to takeover and is trying to become the most popular mobile streaming service.

Shares of Pandora dropped 5 percent earlier today following Spotify's announcement that it would begin to offer its freemium streaming on smartphones and tablets. Since last week, technology publications have spread the rumor that Spotify would begin to offer a free streaming service for smartphones and today's press release has confirmed that information.

Nothing New

Due to how popular Spotify has become for desktop music streaming, the media has responded to this announcement with excitement. While the free streaming services may indeed help Spotify grow on smartphones and tablets, it is something that Spotify's competitors have offered for quite some time.

"Today, Spotify announced new free music experiences for mobile and tablet. Available today, Spotify's new mobile experience allows you to shuffle play -- Your music: Listen to the playlists you create, and to those from the people you follow," according to Spotify's press release.

The same streaming features that are now rolling out to smartphones and tablets through Spotify have already been available from Rdio as well as iTunes Radio. In some ways, the mobile streaming service will still be less advanced than the desktop application, although it is an improvement for current Spotify users.

A Popular Industry

For more than a decade, Pandora has been able to dominate the music streaming industry and it became one of the first mobile streaming services when it launched an iOS app in 2008.

Since Pandora expanded its services onto mobile devices, the music streaming industry has seen a plethora of companies attempt to dethrone Pandora. Spotify, Rdio, iTunes Radio, and Songza all offer free and premium access to streaming music.

The size of the market has made it very difficult for newcomers to gain attention, especially since all of the services have had to attain contracts with individuals, bands and record labels before offering any of their songs. Even for larger companies such as Apple, having to strike a deal with music producers has made it difficult to launch a successful streaming app.

Now that Spotify is rolling out free streaming to mobile devices, it may be able to overtake Pandora as well as iTunes Radio. Both of these services have controlled the mobile side of the industry but with Spotify's enormous desktop user base, it is likely that many of its users will take advantage of the new mobile service. Nearly 6 million of Spotify's users have already decided that paying for mobile streaming is worth the money, which shows just how successful its free service may end up being.

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