Pandora Radio is an automated music recommendation service and available only in the United States. In January, 2012, Pandora Media announced that it crossed 125 million registered users according to Frobes.

The analysis by Forbes, "Pandora competes with Clear Channel Radio, Spotify which has expanded via Facebook and Sirius XM. ...This is a lot and implies the coverage of almost 85% of the U.S. population six years from now. Although it is likely that Pandora will expand internationally during this period, it will not be easy given the complexities related to content licensing."

The analysis continues, "A higher user base growth will also be difficult as competition intensifies from a variety of Internet and terrestrial radio players such as Spotify and Clear Channel Radio's iHeartRadio service, and there are new start-ups such as TuneIn to watch out for. Additionally, costs are a concern and Pandora's business model is questionable."

Pandora's service has two subscription plans: a free subscription supported by advertisements, and a fee-based subscription without ads.

Once we've chosen a genre, or simply typed in a song or artist that you like when we first visit Pandora, we can gradually customize that station closer to our liking by giving each song a thumbs up or thumbs down (don't play for a month).

Pandora keeps a huge database of interconnected music that is ranked in terms of like groups of songs. If we dislike a certain type of song, Pandora intelligently customizes all future songs within that station according to our selections.

While listening, users are offered the ability to buy the songs or albums at various online retailers. Over 400 different musical attributes are considered when selecting the next song. These 400 attributes are combined into larger groups called focus traits. There are 2,000 focus traits. Examples of these are rhythm syncopation, key tonality, vocal harmonies, and displayed instrumental proficiency - from wiki.

Pandora uses a form of low-level artificial intelligence: it tries to learn what your music habits are, and then suggests new music that you might like. The 'recommendation engine' behind Pandora is still very new, and uses arguably shallow criteria for deciding the DNA of a song. - from about.com

Spotify is a Swedish DRM-based music streaming service offering streaming of selected music from a range of major and independent record labels, including Sony, EMI, Warner Music Group, and Universal

Spotify is arguably the best free music service available today. While Spotify is limited to the USA, Spain, the UK,and parts of Europe at this time (sorry, Canadians and the rest of you), it's already a massive hit with listeners. As they surmount music licensing challenges, Spotify hopes to expand into other countries soon.

As for the service itself: Spotify is a fast and reliable radio system that outstrips the competition. Spotify differentiates itself from iTunes and Pandora by behaving as a massive external hard drive (i.e. it plays full songs and albums as if you owned the CD). As a recommendation and discovery tool, Spotify also stands out: it reads your own music collection and playlists from your hard drives, and then suggests new releases, top-10 lists, and your friends' music lists. The interface is clean, and the search box is very convenient.about.com

According to the company, as of Jan 26, 2012, Spotify has 3 million users worldwide.

Spotify is built on a freemium business model where users can listen to ad-supported music for free but after 6 months, the amount of free music drops to just 10 hours per month. Ideally, the service wants to convert all those users who enjoy the free music to paying subscribers, and it charges either $5 or $10 per month, depending on your level of access.

The company last hit a milestone with 2.5 million subscribers in mid-November. The company told the Financial Times that its new 3 million paid subscribers represent "more than 20 percent of its active user base." That's up from 15 percent of active users, the figure the company reported last March, indicating a larger number of conversions.

Spotify has over 15 million tracks while Pandora has over 800,000 tracks.

While Spotify's 3 million subscribers sounds like a big number, it's important to remember that the company offers its service in 13 countries. Streaming music competitor Rhapsody has been around for 10 years and it has 1 million paid users in the U.S. alone. Additional services like MOG and Rdio do not disclose their paid subscriber numbers.

One feature that might have helped Spotify acquire more users is its new enhanced radio service with unlimited skips. Much like Pandora, the enhanced radio feature lets customers create stations based on tracks, artists and albums they like. And unlike free version of Pandora, users can skip as many tracks as they want.

Spotify is currently available in Austria, Belgium, Denmark, Finland, France, the Netherlands, Norway, Spain, Sweden, Switzerland, the United Kingdom and the United States.

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Turntable.fm is a social media website that allows users to interactively share music. The service allows users to create "rooms," which other users can join. Designated users, so-called "DJs," choose songs to be played to everyone in that room, while all users are able to talk with one other through a text interface. The service opened to the public in May 2011, and by late June had already reached 140,000 active users. - from wiki

Users in each dance room has an avatar and can chat with each other. Users can create their own playlist and get up in the DJ booth to battle it out. Turntable.fm a social music platform that encourages hanging out with people and discovering music. If a DJ is playing a song you like, you can add it to your playlist, buy it on iTunes, find it on Last.fm, or launch Spotify.

"I'm flattered Facebook was inspired by turntable.fm and created a listen together feature" says co-founder Billy Chasen about Facebook's new synchronous music listening and chat feature Listen With. Chasen tells me "I look forward to seeing how they interpret what social music means as we seem to have different core philosophies about it (such as the importance of discovering new music from strangers and not just friends)." Chasen seems to think that only listening to what your friends enjoy won't provide discovery as adventurous as Turntable.fm's public rooms.

When Turntable.fm first started in January 2011 (or even when it started rolling out in May), it probably didn't see Facebook at a competitor. At the time Facebook had no official music partnerships. Turntable.fm's approach facilitated both private listening amongst friends and big public rooms of strangers exposing each other to new artists. - Turntable.fm Founder Says He's Flattered By Facebook Listen With, But They're Different.

• Spotify Growth Accelerates, But Can It Knock-Off Pandora?
  January 27, 2012 - streetinsider.com
  According to reports and data issued Thursday, Spotify added 500,000 users in December to bring its total number to over 3 million active paying users. Spotify's ratio of paying subscribers to active free users now stands at over 20 percent, up from just 15 percent last March, when it crossed the 1 million sub mark according to the company.
  ...
  However, from Pandora's second to third quarter, the streaming service gained 3 million accounts to 40 million at the end of October. That's a staggering 33,333 per day, compared with the 8,000 per day Spotify tacked on. Pandora does issue some caution, saying, "active users are defined as the number of distinct registered users that have requested audio from our servers within the trailing 30 days to the end of the final calendar month of the period. The number of active users may overstate the number of unique individuals who actively use our service within a month as one individual may register for, and use, multiple accounts"
  ...
  But will Spotify knock-off Pandora? Maybe, because Pandora only allows for random streaming, while Spotify allows for the creation of playlists and sharing. But Pandora is also working its way into other sectors like automotive, where it hopes to compete with Sirius more wholly.

	Pandora	Spotify
Monthly Visit (source: Alexa)	1,387,000	443,60
Open	Jan(?), 2000	October, 2008
Number of Tracks	800K (July, 2011)	15 million (July, 2011)
Active Users	40 million (Oct, 2011)	5.4 million (Jan 6, 2012), adding 250K every month
License	1. Free with Ads 2. $36/year without Ads, better audio quality	1. Spotify - Free, No Ads, 48 hr trial and can be extended depending on the usage 2. Unlimited ($4.99) - No mobile 3. Premium ($9.99)-mobile, offline mode, offer 7day/30day free trial
Main Features	1. Creating a station by using "thumbs up" or "thumbs down (don't play for a month)" built on the Music Genome Project, a patented mathematical algorithm that scans over 400 musical attributes (like rhythm, tempo, syncopation, key tonality, vocal harmonies, etc. " 2. Simple UI and getting simpler (recently removed bookmark from the web page)	1. Better genetic algorithm for song selection compared with Pandora. 2. Sync tool like iTunes 3. Can make Playlists from the songs stored in hdd & shared disk
Weekness	1. Only 6 skips/hr, 12 skips/day allowed for Free users	1. Too many features (?)
SNS	No link to SNS - Wait-and-see approach CEO Westergren - "It's 80:20, SNS on demand is only 20%"	Facebook, Twitter, Youtube, Flickr
Available Area	US only	US and 7 EU countries
Marketeting	1. SIMPLE UI -> POPULAR 2. Looking for automobile 3. Pandora operates annually at a loss of millions due to complicated DMCA and bandwidth costs.	Arguably the best free music site

Because there is huge difference between webcasting and non-webcasting when we streaming audio, we need to know what constitutes Interactive.

Interactive. For webcasters, it's a word that makes a huge difference. Webcasters who provide non-interactive music services avoid a world of bureaucratic hurt when it comes to copyright royalties. Those lucky souls get to take advantage of the statutory license, which means that copyright clearance is essentially automatic .

Historically, it hasn't been easy to determine precisely when a webcast service crosses the line between non-interactive and interactive. But here is the good news: the U.S. Court of Appeals for the Second Circuit has recently become the first U.S. appellate court to consider, and shed definitive light on, the meaning of interactive.

Many webcasters have a very limited view of what constitutes an interactive service. They'd have you believe a service is interactive only if it lets a listener choose the exact artist and song to be heard, much like an iTunes download. In this pleasant, if not entirely realistic, view, anything else - including services offered by the likes of TheRadio.com or Pandora, where the listener can identify an artist, or even a song, and find an entire channel with similar music - is viewed as non-interactive. The Second Circuit has now provided us all with some guidelines to help sort this all out.

...

The Court concluded that a major consideration - perhaps the major consideration - is the ability of a digital listener to capture and save a high quality copy of a sound recording with little to no effort if he or she knows it is about to be played. That is, if a listener can manipulate the webcast service in a way which permits him/her to snag his/her own digital copy of a song of his/her choosing, then it's likely an interactive service. Stated another way, the Court focused on whether the webcasting service offers listeners an opportunity to steal music they would otherwise purchase.

...

How exactly does LAUNCHcast work? The short strokes are that users:

• Must log in with a unique username/password;


• Must enter basic information about preferences unrelated to music;

Must enter information regarding the user's favorite artists;

• Must identify the user's favorite musical genres and rating them in order of preference;


• Are able to rate songs or artists they hear (or even instantly purchase a song they like).

That final step (i.e., the rating process) continually refines and changes the individual stream offered to the individual listener. Based on all these preferences and refinements, the LAUNCHcast software creates a playlist of 50 songs every time the listener logs on. The listener has no idea what those songs will be or which artists will be featured.

There is actually much more to the software, involving ratios, quotients and other mathematical formulas that aid in the refinement and ordering of the playlists. The Court of Appeals spent a good ten pages describing the process in impressive detail. Though we're glossing over the particulars, we'll note that it is this very level of detail which led the Court to conclude that LAUNCHcast is not an interactive service. As the Court saw it, the LAUNCHcast system does not allow a user either to pick a song and then immediately hear that song, or to predict whether (much less when) any particular song may be played, and or (most definitely) to engage in music piracy. (Indeed, the instant-purchase function probably promotes the legal purchase of copyrighted music).

While LAUNCHcast may be more complex than some other few music services, the Court's discussion does highlight some key characteristics which webcasters can take note of in determining whether their services may be deemed interactive:
In defining interactive, Congress "intended to include bodies of pre-packaged material, such as groups of songs or playlists specifically created for the user";
About 60 percent of the various factors used in the LAUNCHcast programming to create and modify a user's playlist are out of the listener's control (the only absolutely certain control available to a user is the zero rating: by giving a song a zero rating, the user guarantees that he or she will not hear it again);
A new playlist of 50 songs is created every time the listener logs in, which prevents any ability to predict what will be heard during any particular session.

Emphasizing the limited involvement of the listener in the LAUNCHcast song selection process, the Court contrasted listening to LAUNCHcast to listening to radio back in the halcyon days. According to the Court, LAUNCHcast listeners do not enjoy even the "limited predictability that once graced the AM airwaves on weekends in America when 'special requests' graced lovestruck adolescents' attempts to communicate their feelings to 'that special friend'". Ah yes, the good old days. But the Court's comparison prompts this reminder to broadcasters who stream their over-the-air programming: be careful about inviting "special requests' from listeners, since granting such requests could lead the webcasting element of your operation to be deemed interactive, with all that that entails. - from "Interactive Webcasting"? The Second Circuit Weighs In