Like the rest of the online service industry, Spotify is in the midst of a rapid cycle of evolution and growth, and today Bloomberg suggests its next big spurt is going to be in online radio. Insider sources have told the news outlet that Spotify is working on adding a Pandora-like component to its music streaming service — one where you're not in control of the tracks played by the application. You may already be familiar with Spotify Radio, which has a great deal in common with Pandora, but the key difference in the new version being reported on today is that it would qualify under the US radio licensing regime, exactly as Pandora does. That would mean a predetermined royalty fee for every time a song is played and, crucially, that Spotify won't have to negotiate directly with artists and music labels. It can just play the song, pay the royalty, and move on.
"A Pandora-like radio service would give Spotify users access to artists who are now withholding their music."
So a new Spotify Radio could finally allow you access to Metallica and The Beatles, even if it doesn't allow you to choose when those songs are played. That'll certainly be an appealing benefit to consumers, but from Spotify's perspective, the lower and more predictable royalty scheme on offer when serving up radio streaming also gives it a chance to lower its user acquisition costs. It still lags far behind Pandora in terms of registered users, so emulating that company's successful strategy sounds like a decent plan to compete with it. Pandora is currently a US-only, ad-supported service, and by the sound of Bloomberg's report, Spotify's alternative will be exactly the same. Bloomberg expects the new radio offering from Spotify to be launched by the end of the year.
A Spotify spokesperson told us that the company has "no announcements to share at this time."