Why New Spotify-Powered Apps Are Free, Desktop-Only...For Now
Why New Spotify-Powered Apps Are Free, Desktop-Only...For Now

The battle for American music lovers heated up Thursday as Spotify lifted listening limits on U.S. users of its free, ad-supported service.

When it launched in the U.S. in July, Spotify said it would offer six months of free, unlimited listening to U.S. users but impose time limits thereafter. But the limits were never actually put in place. Nine months later, U.S. users are still listening without the time limits that were outlined in July.

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On Thursday, the company officially abolished time limits on free users in the U.S. "Right now, if you're a free user, you can continue to enjoy millions and millions of tracks without time limits, gimmicks or catches," the company wrote in a blog post.

The move puts Spotify on par with Pandora, the U.S. leader in streaming music with 69 million active users. Pandora abolished its 40-hour-per-month listening limit in September, just two months after Spotify came to the U.S. Of course, Pandora and Spotify offer different products. The former is Internet radio and the latter is on-demand. But they target the same group of music lovers. And now that Spotify offers a radio feature as well as radio apps such as Soundrop, Spotify is more like Pandora than ever.

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Thursday's move also affects some of Spotify's on-demand competition. Both Rdio and Mog offer free services in addition to their premium levels of services. But neither sells advertisements against that free listening. Instead, they use the free service as a tool to convert non-paying listeners into paying customers. But with Spotify now offering unlimited free listening, Mog and Rdio could have a more difficult time attracting listeners.

Spotify put in place listening limits in Europe before the company's U.S. launch, a move widely seen as an effort to win their rights holders' participation for the U.S. service. Those time limits remain in place in Europe, although the rule that free users are limited to five plays of any particular songs was lifted Thursday in Sweden, Finland, Norway, Netherlands and Spain.

What a difference a year makes. Last year, Spotify was easing rights holders' concerns that listeners would not have the proper incentive to upgrade from the free service to one of the two levels of paid service ($5 for desktop and $10 for desktop and mobile). Now Spotify appears to have secured rights holders' permission to allow unlimited free listening in the U.S. One explanation could be that paying subscribers aren't exposed to the advertisements record labels run on Spotify. But perhaps there is something about the U.S. market - like the incredibly popular, and free, Pandora - that requires a different strategy than Spotify employs in its European markets.