Posted by Martin Algesten, 6th October 2009
Surely Apple is not going to sit and watch idly as a small European upstart with a bad logo eats its market share? Week by week, update by update Spotify adds literally thousands of new songs, which means Apple's current lead in content is gradually eroding and eventually may result in a significant amount of customers opting for the flat fee as-much-as-you-can-eat style service. With Spotify's recent iPhone killer app, (Apple approved) and sold off the iTunes store, which introduced elected playlists offline, a first step is taken to conquer the portable music market, which means one of the last arguments to buy your music is also going away. Incidentally, the iPod Touch and iPhone may be the reason Spotify has a chance to succeed where other similar services have failed - portable players are key.
Interestingly, shouting about DRM shackles is nowhere to be heard amongst the Spotify crowd - is it, perhaps, that Spotify is a black box - we never get to see the individual files, so there's no feeling of right to own them? Or are we mentally relating to the service as a rental, akin to Blockbusters, so we accept the non-ownership?
Seems to me Apple would be foolish to just sit back and watch as this little company grow stronger. Spotify may not be returning a big profit yet, but the mere resonance amongst the hip young crowd, may indicate a market space, and surely Apple would want this one too, and they are in a prime position to grab it: The iTunes store has already got the songs; people have accepted that you must use iTunes to access it; Apple has complete control over the iPods (Spotify will never run on a Shuffle); the payment systems are in place; the regional markets are there; they have the existing commercial relationships with the media owners. Enter: iTunes Loaded.
iTunes Loaded comes in two versions. One free version that is powered by iTunes Genius, and a paid for version where you are in control. In the free version, Genius Fill will help you load up your iTunes with fresh tracks you probably like based on your current library. The tracks are not burdened with ads, but you can't chose which tracks you want or when they expire.
The paid for service puts you in control. You can still let iTunes Genius find new tracks, but you are free to keep, reorganise or remove. You mix your favourite tracks into playlists, chose to access these playlists offline and synchronise them with all your iPods. You can also share your iTunes Loaded playlists over Bonjour or any way you want with your iTunes Loaded friends (Email, Facebook, etc). Your iTunes Loaded playlists will of course also sync with your Mobile Me account and be available on all your Macs.
One potential stumbling block is if the media companies don't want to license the music to Apple in this way. The owners are already concerned that Apple has become a too strong player, dictating the terms in the agreements, and they may see Spotify as a way to counter Apple's dominance. I wouldn't be surprised if Steve is battling this point in endless meetings already.