Spotify Radio conducts music with Pandora-like app

PARIS--Music-streaming service Spotify has followed in the footsteps of rival Pandora with radio stations, a way to let people listen to songs the service selects.

"We've built a radio app on top of our platform," said Spotify co-founder and Chief Executive Daniel Ek, announcing the app today at the LeWeb show here. And he lost no time baiting his rival: "It's kind of like Pandora, but with unlimited skipping and unlimited stations."

Spotify until now has been about playing specific songs or albums that a subscriber chooses. With stations, the subscriber chooses a category, but the service does the picking. Skipping--which is expensive for Pandora, because it pays music labels by the song--lets people move ahead if they don't want to hear a particular song.

The radio station option is built into into the newest preview builds of Spotify, according to a company blog post.

"Starting a radio station is easy. Click 'Start Artist Radio' at the top of any artist page or just drag a track to 'Radio' in the left sidebar. Spotify will make a radio station of similar music...Your station will keep playing music based on your initial choice," the company said. "Thanks to our all-new intelligent recommendation engine and multi-million track library, Spotify Radio is a music discovery experience without equal."

The move is a significant change for Spotify because it can make using the service more passive--more of the "lean-back" experience of TV than the "lean-forward" experience where a person actively controls what's going on, Ek said. And Spotify subscribers wanted it.

"It was a big use case people were asking for," Ek said. "Spotify historically hasn't been good at curating music."

The change also increases the importance of discovery on the service. As with the social integration with the company's Facebook app, which lets people see what friends are listening to, the radio station app will help expose people to new music.

And ultimately, 28-year-old Ek hopes that means more money for the company.

"The more they engage with Spotify, the more likely they are to pay," Ek said. Spotify offers its service for free over the Web with ads, but offer subscriptions for a version without the ads and more expensive subscriptions for those who want to use Spotify on mobile devices, too.

He has no plans to cash in through an initial public offering though.

There's "no IPO in sight. Definitely not," Ek said. He elaborated:

We just want to build a truly great company. We believe it starts with the product. Then it's all about the people and the culture. We want to keep doing that. Everything else is secondary. The objective of the company is not to sell the company.

Apple has pioneered digital music with its iTunes service for buying music. Ek sees Spotify as the next step.

"People continue to use iTunes," Ek said, but when they start using Spotify for music discovery, "they move from ownership to the access model."

The company's Facebook app has helped it expand, he added.

"Facebook is the greatest distribution platform on Earth," Ek said. "When you get the sharing flowing, it really changes how people discover music and how they share it."

Spotify got its start in Sweden, spent two years spreading across Europe, and arrived in the United States only in July.

Spotify got started in Sweden because of fast Internet access, he said.

"Because there was ubiquitous broadband, and it was super-fast, consumption existed [before] the services existed," Ek said, so music piracy took off with Kazaa and the Pirate Bay in Sweden. "Why we started Spotify was as a reaction to that. It was obvious," Ek said. "We felt the most important thing was we had to create a product that was better than piracy."