Music Services Step Up Competition with Spotify

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Most music enthusiasts are aware of Spotify’s terms of listenership: you can stream for free online with ads, or additionally offline, ad-free, on multiple devices, for 10 bucks a month. If you sign up for premium, the first month is free, allowing you to enjoy that second blissful option for 30 days until you forget to cancel and it shows up on your credit card statement. Spotify has 10 million users worldwide, first attracting Itunes users who were unhappy over the no-longer-99-cents songs, and moving on to Pandora fans who wanted both radio AND savable playlists in the same service.

After today’s announcements, it looks like at least two other music providers are attempting to step up as rivals. One is for thrifty listeners, the other for audiophiles.

Rdio is a four-year-old service created by the makers of Skype. While it was initially admired for its clean, clutter-free design, it’s pay-for-music system fell short of the kind of user-numbers Spotify (or even Rhapsody) boasted. Now it’s switching to a “freemium” model – you get free songs initially, and better features with subscription (at $9.99 a month). This new free-inclusive version booted up this morning in 20 different countries.

“What we’ve learned collectively over the last few years,” said Anthony Bay, Rdio’s chief executive, “is that the most successful models are freemium models.” That checks out – time will tell if Rdio can compete.

Another competitor is approaching from a different angle: Tidal is offering something Spotify doesn’t. Instead of providing compressed MP3, AAC or OGG files, Tidal streams lossless FLAC files with many times the bitrate that other services offer. Translation: it’s super high quality that doesn’t suck up tons of energy. You can stream over the internet, or actually download tracks. Over 75,000 HD music videos will be available as well, and apps will be crafted for mobile devices. The catch? A $20 per month subscription.

“Tidal reflects our mission to deliver the highest quality music streaming service,” said CEO Andy Chen. It’s pricy, but they’re betting it’s worth it. Tidal will launch in the US and UK sometime next month.