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Spotify launches app to challenge Pandora

Spotify Ltd. is going after Pandora Media Inc.’s mobile music streaming market.

Today, Spotify launched an application available through Apple Inc.’s AppStore that lets users stream music on mobile devices. 

Spotify is a digital music service that allows users to access and play almost any song they desire. In Spotify’s mobile version, users will be allowed to listen to radio stations.

“We feel like the radio experience of just hitting play, leaning back and not controlling exactly what plays is core to a great music experience,” said Charlie Hellman, vice president of product for Spotify, in an interview with Bloomberg.

Like Pandora’s mobile app, paying premium customers will get to listen to music without ads, but non-paying customers will hear ads. 

Analysts believe Spotify could take a big chunk of Pandora’s market because of how licensing music works. In the United States, Pandora pays low royalty rates set by Congress. But Pandora doesn’t do as well overseas, where royalty rates are not set by the government. 

Spotify may have an advantage, as it has made agreements with several major record companies to share profits, giving its mobile app the chance to spread abroad.

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