Online music providers are getting more and more popular right now. Young people like that they can discover and hear new songs for free. They have access to a huge range of songs in these online data banks. It’s a new way of listening to music. There are many of online radios, but Spotify and Pandora are the most popular ones. Even if both are successful, they’re not quite the same.
The main difference between Spotify and Pandora is that Pandora is an online-radio where music experts and amateurs try to classify songs to about 400 attributes. They suggest songs according to your pattern of music taste and you can say if you like it or not. But a significant disadvantage of Pandora is that it’s not possible to rewind or to repeat songs. And you can just skip one song within one hour and can’t choose a certain artist or music band, you are dependent on the choice Pandora makes for you.
Spotify, on the other hand, is a music streaming service where you can decide yourself what kind of music you’re listening, you just get suggestions, see playlists of friends or popular playlists of strangers. You can create own playlists and you see new published songs and albums.
In numbers, Pandora is the bigger provider of music. Spotify has about 10 million users worldwide and about 2.5 million paid subscribers since it was developed in 2008. The New York Post recently found that even if Spotify has 3 Million user in the U.S., only 20% (60.000 users) are paying for it. Pandora has 50 million users, and it’s for free.
With Spotify you’re totally free within your choice of music but you have other limits: You are forced to listen to commercials, even if you skip the song or pause Spotify, it starts at exactly the same point, which is really annoying. And need to have a Facebook account to use it and, at least in Germany, you only have 10 hours of free music per account.
Spotify says it wants to stop the illegal download of songs but it's paying the artists just a fraction of the money than they would earn with a sale of a real CD. If an artist sells a CD, he can keep about 3 euro for himself. With Spotify, it’s just 2 cents, so the album has to be streamed about 145 times to even that out.
So, even if Spotify is using your Facebook data to find out which bands you like and even if it’s much smaller than Pandora, I think it will be the future of the music online streaming. First because it has allied to Facebook. Everybody knows that Facebook is stealing your data, but I have the impression people don’t like it but already accept it, because almost no one is dropping out.
Spotify also has an enormous advertising potential with help from Facebook. Second there is the fact that you can decide what you’re listening by yourself. You’re more independent because the system is going into the taste of the user and is just making suggestions. And the third big point is the social component: you can share music with friends, you can see in real-time what you’re friends are listening right now and can get inspiration. So it’s a very social way of listening to music. If you have friends with a great taste of music, you can subscribe their lists or show them your own.
At Pandora you can relax and get suprised by a music choice of experts. At Spotify you can be your own DJ. The only way Spotify is endangering that success is with the new time limit of 10 hours per hours. I think many user will think twice if they pay 10 euro per month or if they change to another streaming service.