Two things that made a big initial splash earlier this summer that haven't been able to sustain the hype: google+ and spotify. Spotify just recently arrived in America and, if my friends were to be believed, revolutionized listening to music online. I shrugged. The reviews made it sound a lot like rhapsody. I was an early rhapsody adopter, too. And now that I've tried spotify (thanks, London, for letting my circumvent the whole "by-invitation" hype crap), I can honestly say it's just a reboot of rhapsody. But first...
Pros: on-demand music license, large library, friends, playlist sharing, compatibility with mobile mp3 players
Cons: requires software download, weak suggestion feature, won't necessarily have the songs you're looking for
The one huge plus that spotify has over services like pandora and last.fm is the on-demand music license. That means you don't just enter a song or artist that you like and the program generates a playlist based on what it thinks (should be) your tastes or similar artists & songs. It actually plays the song you want, when you want it. But on-demand licenses for music are much more expensive than a broad license where a record label can influence the licensor to also play other artists and songs.
Spotify offers 3 different tiers of service, with only the lowest being free. It gives you the ability to listen to 20 hours of on-demand music per week for free. The paid services grant you unlimited listening hours and the ability to move songs to your mobile devices for free among other premium features.
Another service that I was initially intrigued with, blip.fm, offers pretty much the same on-demand listening ability except they're not licensing the songs. They rely on users linking to songs on the internet, including youtube. And unlike spotify, searching for a song by title or artist retrieves loads and loads of returns, with most of them being lame covers by youtubers. But at least you don't have a 20 hour time limit.
Playlist sharing is a really exciting feature on spotify. My friend shared a playlist that he had found of all the albums released in 2011 that rated 8 or higher on pitchfork. People can share mixes of their favorite love songs, work out jams, or chill tunes all without actually committing the songs to tape or CD.
And while the spotify library is huge, it's not comprehensive. I tried to put together a mix of all the longlisted 2011 Polaris nominated albums but too many weren't available. This isn't some kind of hipster "obscurer than thou" posturing; these are albums nominated for a pretty major national music prize in Canada.
Another (sorta) downside is the very poor suggestions feature of spotify. Some of you may remember my complaints about pandora's broken algorithm for suggesting songs. It simply wouldn't accept that I hate Coldplay based solely on the fact that I like Radiohead. And this wasn't just a case of the lazies on my part; I actively disliked every single Coldplay track that played. But the program just wasn't smart enough to figure out that just because I like one British alt-rock band that I couldn't also dislike everything Chris Martin touches. A similar thing happened with Pinback. Remember that thing I said about on-demand song licenses being expensive versus other ways to license music? That's (partially) to blame for this problem.
Part of what I really like about last.fm (and to a lesser extent pandora when I still suffer to use it) is the dynamic suggestion feature. It may not play the band or song I want immediately upon me inputting it, but if if wasn't for said feature, I wouldn't have discovered Craft Spells of brothertiger or a number of other really amazing bands. It's kind of like if pitchfork wasn't a pretentious douche but that cute girl at the record store who asks you what you've been listening to and then suggests a really awesome album by a band you've never heard of. Spotify let's you hear what you want when you want (if it's got it) but it doesn't help you hear the stuff you'd want to hear if you only knew about it.
The biggest flaw of spotify is the requirement that you download software to use the service. Last.fm, pandora, even blip.fm don't require you to do this. In the age of ever increasing hard drive sizes, this isn't really a storage complaint. It's simply a matter of inconvenience. When I'm (theoretically) trapped in my cubicle for 8 hours a day working on a company computer, administrative access isn't going to allow me to download and run a new piece of software. But you know what it will let me do? Point my browser over to last.fm and listen. It might seem like a minor complaint, but it definitely delayed me from trying the service.
One of the big features touted by spotify is compatibility with all mobile devices and the ability to download music and playlists to said devices without paying a per song fee like itunes. This spotify feature requires paying a subscription fee, something I'm loathe to do when I can access so much music for free through the other services I've named, youtube, record label and music review websites, and others. And if I really want to pay money to hear an album, I'll probably just go ahead and invest in buying that record or CD.
But what I will say is I've been burned on that promise before. Rhapsody made the same proclamation to me way back in the day before itunes ascended to its current marketplace dominance. And you know what? It didn't work. I couldn't move songs I bought on rhapsody over to my second generation ipod nano. I couldn't even play them in itunes without first burning them to a CD and then importing said CD into itunes. It was a waste of time and money (blank CDs weren't cheap back then) and ultimately the reason I cancelled my rhapsody subscription.
Can anybody with the premium spotify service verify if it really is compatible across mobile devices? I know the use of DRM is on the wane with music services, drives mostly by Amazon offering DRM-free songs.
Overall, I like spotify but I don't think it will replace last.fm as my online music provider. If I want to hear a new album or try to dig through a artist's back catalog or if I really, really need to hear a particular song, I'll use it. But I also really like the adventure and exploration of suggested music rather than on-demand licensing.
It will be interesting to see if my account with migrate with me back across the pond when I return to law school in the fall.
Verdict: Worth a try, especially if you're seeking out something in particular rather than just wanting to listen to some tunes.
 I'll reserve comment on whether this practice is good or bad for the end-user, i.e. the listener.
 American users definitely have the advantage for the paid plans. 10 is the magic number for spotify and US$10 is a lot cheaper than £10.