Spotify buys music data company Echo Nest

The streaming music service buys a company behind a savvy music-intelligence technology, which will not only power recommendations and playlists for Spotify but also give it a new revenue stream.

Spotify founder Daniel Ek presents the streaming music service's free mobile option at an event in New York. Spotify

Streaming music service Spotify on Thursday announced it has purchased the Echo Nest, a music intelligence company that powers Web radio, recommendations, and playlists for a swath of media firms -- including some Spotify competitors.

Finanancial terms weren't disclosed.

It's Spotify's answer to Pandora's Music Genome Project. Pandora, the biggest radio service on the Internet, evolved out of a venture to separate and identify the DNA of the world's catalog of songs,and it has credited its growth to Music Genome Project's ability to coalesce related songs based on that data.

The Echo Nest purchase also provides Spotify with another stream of revenue from the startup's business of licensing its technology to outside partners to create playlists, detect buzz about particular artists and recommend similar songs.

In a statement, chief executive and founder Daniel Ek said the company has "been fans of the Echo Nest for a really long time" and that the takeover will help Spotify's "quest to play you the best music possible."

Sweden-based Spotify and the Echo Nest have collaborated before, with a visual-playlist tool called MixShape last year as one example.

However, the Echo Nest's platform has been employed by many others, including Spotify rivals like iHeartradio, MOG (which has morphed into Beats Music), Rdio and SiriusXM. The Echo Nest's clients also include media companies, tech outfits, and major brands like MTV, Twitter, Foursquare, VEVO, Yahoo, Nokia, Coca Cola, and Reebok.

Spotify said in a release that the Echo Nest API will remain free and open. The API currently is free for noncommercial uses.

Featured Video

How Pixar created the world of 'The Good Dinosaur'

Pixar's upcoming new film imagines what it would have been like if dinosaurs never became extinct.'s Lexy Savvides reports on how real-world data helped make the movie's prehistoric landscapes look incredibly authentic.

by Lexy Savvides