Answers to Spotify questions
A follow-up to yesterday's post about Spotify, which is poised to become my new favorite online music service. Because the company is based in Europe (headquarters in London, R&D in Stockholm), we missed one another because of the time change, but the company got back to me with some answers to my questions late last night.
First, Spotify's unavailability in the U.S. isn't only because of the complexities of music licensing, but also because the company wants to make sure it can scale reliably in its home market before expanding overseas. Fair enough--one of the most amazing things about Spotify is the way it plays songs immediately, and I imagine they have to plan for traffic carefully to maintain that level of reliability. Second, Spotify corrected me about the free service--since Feb. 10, it's been available to all residents of the U.K. without an invitation. (Go. Get it. Now.) However, other European countries must still wait--again, that's because the company wants to make sure Spotify can scale before adding a flood of new users.
Finally, the company is still experimenting with audio advertising models to see what customers will put up with versus how much advertisers will pay, but it's expecting to limit advertisements to 30 seconds, and expects to insert fewer ads than commercial radio (which isn't saying much, at least in the U.S.). This is probably the most important aspect to get right--if the ads are too frequent or too intrusive, customers won't come aboard, but if they're too infrequent or easily skippable, advertisers won't pay enough to keep the service running. It'll be interesting to see whether Spotify is able to make the ad-supported version pay for itself, or uses it primarily as a way to drive upgrades to the paid service. The latter wouldn't be all that revolutionary, although I still think Spotify's user interface and speed of response are better than the competition's.
Matt Rosoff is an analyst with Directions on Microsoft, where he covers Microsoft's consumer products and corporate news. He's written about the technology industry since 1995, and reviewed the first Rio MP3 player for CNET.com in 1998. He is a member of the CNET Blog Network. Disclosure. You can follow Matt on Twitter @mattrosoff. 
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